Senators call for higher bank capital in letter to regulators
WASHINGTON (Reuters) - A bipartisan group of senators on Tuesday urged bank regulators to finish new capital rules, forcing banks to meet higher capital ratios and rely less on complicated calculations of the riskiness of their assets.
Debate in Washington has heated up over whether the 2010 Dodd-Frank law and other measures did enough to crack down on banks such as JP Morgan Chase & Co, Citigroup Inc and Bank of America Corp.
Two members of the group, Republican David Vitter of Louisiana and Democrat Sherrod Brown of Ohio, are working on legislation that would halt implementation of an international accord known as Basel III and instead impose a much higher 15 percent capital ratio on the biggest banks, according to a draft of their bill.
The pair, plus Republicans Bob Corker of Tennessee and Susan Collins of Maine and Democrat Elizabeth Warren of Massachusetts, called for similar proposals in a letter to Federal Reserve Governor Daniel Tarullo, Comptroller of the Currency Thomas Curry, and Martin Gruenberg, chairman of the Federal Deposit Insurance Corp.
The group said regulators should finish new capital requirements for the biggest banks first, before crafting simpler rules for smaller firms.
Instead of using risk weights that draw on banks' own models to determine how much capital they should hold, regulators should opt for a higher overall capital requirement for the big banks, the group wrote in the letter.
Members of Congress have complained that even after the 2007-2009 financial crisis, some U.S. banks remain too big and could have a devastating impact on financial markets if they were to fail.
Also on Tuesday, Senator Bernie Sanders, a Vermont Independent, and Representative Brad Sherman, a California Democrat, introduced a bill to break up such banks.
Observers have said it is unlikely that any new financial regulatory legislation, even with the bipartisan support that Vitter's and Brown's proposal has, would make it through a deeply divided Congress.
(Reporting By Emily Stephenson; Editing by Leslie Adler)