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Thursday, December 15, 2016

Banks need about $70B more in qualifying capital by Jan 1, 2019 deadline - Fed

The Federal Reserve says big banks need about $70 billion more in loss-absorbing capital before new rules take effect on Jan 1, 2019.

The new standards will require eight systemically-important banks and financial firms have long-term debt that can be transformed into equity if the company fails. The rules are designed to prevent tax payers from footing the bill of a bailout.

In a statement, Yellen calls it "one of the last critical safeguards" to be put into place after the crisis. It requires 21.5% to 23% of risk weighted assets to qualify.
There is a question, however, if it will be fully implemented. Republicans have warned against implementing new rules before they take over.

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