The Herald Bulletin

Morning Update

Nation & World

August 20, 2013

Obama urges regulators to enact Wall Street rules

(Continued)

WASHINGTON —

The Federal Reserve last month raised the amount of capital that big banks must hold to reduce the threat they might pose to the broader financial system. The requirements, which meet international standards agreed to after the downturn, have met some resistance from financial institutions as being too high, but have also been criticized for not being high enough.

"There is a trade-off between holding capital and the ability to lend," said Scott Talbott, a senior lobbyist for the Financial Services Roundtable. "Our concern is that as you take a look at all the regulations in totality, you will decrease the banks' ability to help the economy."

The Fed on Monday said that while big banks have made progress in preparing for strains like those brought by the 2008 financial crisis, they also need do a better job determining how much capital they need to cushion against a future crisis. The Fed's report, based on stress tests applied to the banks, coincided with Obama's meeting with regulators.

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