Europeans Unhappy Over High American Capital Standards


The Fed has adopted rules that require foreign banks operating in the US to maintain the same capital standards as US banks. German bankers are unhappy about this:

In comments prepared for a speech in Berlin Monday, Andreas Dombret said that recent U.S. regulatory initiatives, “such as the enhanced standards for bank holding companies and foreign banking organizations, worry me. They seem to contradict the need for international cooperation.”

….The Fed recently approved new rules that force the largest international banks operating in America to establish U.S.-based “intermediate holding companies,” which will be subject to the same capital and liquidity requirements as domestic banks….European bankers have sharply criticized the move. “This is a considerable competitive handicap for European banks, as their U.S. competitors aren’t subject to any equivalent requirements in the EU,” said Michael Kemmer, head of the Association of German Banks last month.

Well, in that case, I recommend that the EU raise its capital standards and then subject American banks to it. Instead, last month they decided to ease leverage standards. I guess they’ve already forgotten what things looked like back in 2010. In case you have too, the chart on the right tells the story.

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

payment methods

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate