The eight largest U.S. Banks must set aside billions of dollars more in cash reserves if they want to avoid restrictions on bonuses and dividend payments.
The Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have adopted a final rule that strengthens leverage ratio standards for the largest, most interconnected U.S. banks. The rule applies to bank holding companies (BHCs) with more than $700 billion in consolidated total assets, or more than $10 trillion in assets under custody. Covered BHCs must maintain a leverage buffer greater than 2 percentage points above the minimum supplementary leverage ratio requirement of 3 percent, for a total of more than 5 percent, to avoid restrictions on capital distributions and discretionary bonus payments.
