U.S. Banks Could See 20% Rise in Capital Requirements

On Monday, the Wall Street Journal reported that U.S. regulators could be looking at mitigating the risk of bank failure and propose that capital requirements for large U.S. banks should be around 20%.

The report stated that the exact capital requirements amount would depend on the bank’s business, with banks that are highly dependent on fee income, including fees from investment banking or wealth management facing large capital increases. 

The banking industry stated that such stringent capital requirements could result in ramping up M&A activity in the banking sector in order for banks to stay competitive and could make it more difficult for people to get loans from banks.

Here is a list of bank stocks that could be affected by this decision.

The collapse of some U.S. regional banks has adversely affected bank ETFs with the SPDR S&P Bank ETF (KBE) tanking by more than 20% in the past year.