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Fed Releases Capital Buffer Plan

Plan would require big banks to set aside capital buffer when market risks increase.

By Cheyenne Hopkins, Bloomberg | Updated on December 21, 2015

The Federal Reserve is seeking public comment on the standards it would use in requiring the biggest banks to set aside additional capital as a buffer in periods when market risks raise the threat of future losses.

The countercyclical capital buffer is meant to ensure that internationally active financial institutions have enough capital to absorb shocks without threatening the broader economic system. It will apply to banks with more than US$250 billion in assets such as JPMorgan Chase & Co., Citigroup Inc., and Goldman Sachs Group Inc., and those with more than $10 billion in foreign exposure.

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