Fed to Hit Biggest U.S. Banks With Tougher Capital Surcharge
Goldman and Morgan Stanley both count such short-term liabilities as more than one-third of their total liabilities, the highest levels among the eight U.S. banks likely to be affected by the rule, according to data from SNL Financial. Both firms have said in regulatory filings that they are maintaining enough capital to meet the Basel surcharge level. They declined to comment Monday.
.. One new wrinkle in the Fed’s plan is to tie the size of the surcharge to a bank’s reliance on short-term financing, essentially penalizing banks that readily turn to the wholesale funding markets. The Fed has been eager to reduce reliance on short-term financing, such as overnight loans, which were a source of instability during the 2008 financial crisis when such financing dried up.