Minimum capital requirements

The new chair of the Basel Committee on Banking Supervision called for member nations to finish the job of implementing post-financial crisis regulations. He also warned them not to put economic goals over safety considerations.

The Federal Reserve finalized its capital requirements for large banks Wednesday based on June's stress test outcomes.

The Federal Reserve attributes the uptick in simulated losses in this year's stress test examination to heightened risks on bank balance sheets and higher expense levels. Credit cards and corporate lending were top areas of concern for the central bank.

The mortgage giants will have to meet benchmarks for covering cash flow needs during stressed periods. The FHFA views the requirements as a prerequisite to the companies exiting conservatorship.

In a letter to Director Mark Calabria, 17 organizations requested an additional 60 days to weigh in on the proposal meant to strengthen Fannie Mae and Freddie Mac's balance sheets post-conservatorship.

Chris Dodd and Barney Frank said the legislation — nearing its 10th anniversary — put banks in position to be a stabilizing force during the coronavirus crisis.

Some observers wonder if proposed regulatory targets for Fannie Mae and Freddie Mac will stoke concerns about low shareholder returns. But others suggest those fears are unfounded.

Measures that delay the Current Expected Credit Losses standard and reduce a community bank capital ratio are temporary, but the industry now sees an opening to argue that they should be permanent.

The OCC and FDIC are holding off on easing debt limits in response to the coronavirus pandemic, leaving billions of dollars locked up at banking subsidiaries that could be used for lending amid the deepening economic crisis.

If banks are unable to weather the economic fallout from the outbreak, calls for more dramatic reforms could get louder.