Up 20 percent – U.S. banks could use more equity

According to the newspaper report, the recent bank failures in the US form the background to the overweights. In March, customers began withdrawing money en masse from regional banks Silicon Valley Bank (SVB) and Signature Bank. When the California SVB collapsed, 42 billion dollars (about 39.29 billion euros, the equivalent of about 39.29 billion euros) were taken from the accounts within five hours. It was the biggest collapse of a US bank since the 2008 global financial crisis.

Details still unclear
Tighter capital requirements for major banks and institutions could be coming now, as the “Wall Street Journal” reported. You may be faced with an average of 20 percent higher requirements. Shareholders’ equity is the portion of a company’s capital that consists of its own funds, such as undistributed profits and shareholders’ money. It was said from trusted circles that the planned tightening could be presented in June. The exact amount depends on the size of the banking business.

Not only banks are affected by the considerations, but also institutions such as Morgan Stanley and credit card company American Express. These are highly dependent on fee income, for example from investment banking. There was initially no comment from the two. The US Federal Reserve recently said it was considering stricter rules for financial institutions with assets (show which assets are available, take note) in excess of $100 billion. Fed Vice Chairman Michael Barr told a congressional committee in May that the central bank is carefully considering rule changes for larger regional banks.