No, Making Banks Hold More Capital Is Not Going To Wreck The Economy

Mark Gongloff, Huffington Post

Uh-oh, everybody: Bankers are warning that the U.S. economy could be in deep trouble. Not because bankers wrecked it again, like that last time, but because we are being mean to bankers.

Fortunately, these bankers are probably wrong.

Like they do, bank flaks have rushed to warn that the higher bank capital requirements proposed on Tuesday by the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation will slow down lending and economic growth, make U.S. banks less competitive against European competitors and be cruel to puppies and kittens.

The first quote in Wednesday’s Wall Street Journal story (subscription only) about the new capital rules, in fact, is just such a warning from a banking representative:

Read more here

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