The changes, which regulators are expected to propose this summer, come after what Barr described as a holistic review of big-bank capital requirements. Banks will also face more difficult stress tests to gauge their ability to weather a hypothetical recession, tougher executive-compensation restrictions and heightened liquidity requirements, Barr said. While the largest U.S. banks emerged from the pandemic in solid financial shape, Barr has signaled for months that he believes capital requirements should be higher. Much of his overhaul revolves around the last piece of capital rules that global policy makers agreed to implement after the 2007-09 financial crisis. Regulators also are preparing to expand the scope of a separate plan to add to regional banks’ financial cushions.

Source: Wall Street Journal July 10, 2023 17:05 UTC