Are higher capital ratios coming?
Section 171 of the Act has two other provisions of note. First, the Act requires the Comptroller General to conduct a study of the access of smaller insured depository institutions (defined as institutions with total consolidated assets of $5 billion or less) to capital. Section 171 also charges the federal banking agencies to develop capital requirements that address not only the risks posed by depository institutions, depository institution holding companies and nonbank financial companies to the entities themselves, but also to other public and private stakeholders. The risks to be considered by the regulators include the risks of derivatives activities, securitizations, repurchases, credit concentrations and market-share concentrations. Although to date the federal banking agencies have imposed increased capital requirements through the examination process on a case-by-case basis, a plain reading of Section 171 of the Act suggests that all financial institutions may soon face incre
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