Wall Street banks vs Federal Reserve
The article addresses the disagreement among the world's largest American banks regarding capital rules, particularly the proposed revisions that the Federal Reserve plans to adopt for calculating additional charges on systemically important banks. It indicates that these adjustments will become more sensitive to risks, especially concerning short-term financing in wholesale markets, which will impact banks' capital exemptions. JPMorgan Chase and Bank of America are calling for the cancellation of these revisions, fearing they may encourage trading activities at the expense of lending. In contrast, Goldman Sachs and Morgan Stanley support their swift adoption, arguing they will make risk measurement more accurate. Such disagreements are rare within the US banking sector and come at a time when the Federal Reserve is seeking to finalize these changes before the end of the year to restore a balance in capital rules after years of calls for loosening them since the global financial crisis.
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