FDIC putting the screws on Banks - This will affect us all

[Mic Drop]

Large banks would be required to maintain a minimum amount of eligible long-term debt equal to the greater of 6 percent of risk weighted assets, 3.5 percent of average total consolidated assets, and for banks subject to the supplementary leverage ratio, 2.5 percent of total leverage exposure under the supplementary leverage ratio.  Additionally, the proposal would: 

• Prohibit large banks from engaging in certain activities that could complicate their resolution; and
• Disincentivize banks from holding long-term debt issued by other banks to reduce interconnectedness.

Because large banks generally pose less risk than the largest and most complex banks, the proposed requirement would be calibrated at a lower level relative to existing requirements for the eight largest and most complex banks.  Under existing rules, the largest and most complex banks are subject to total loss-absorbing capacity (TLAC) requirements, including minimum and buffer requirements, as well as a long-term debt requirement.  Under the proposal, a large bank with total assets of $100 billion or more that is not one of the largest and most complex banks would not be subject to TLAC requirements. 

https://www.fdic.gov/news/fact-sheets/ltd-resolution-8-29-23.html

[Mic Drop]

 

[TrueTomHarley]

17 hours ago, Mic Drop said:

 

A lot of yachts in jeopardy if what this fellow is saying comes to pass.