Fed Finalizes Higher Capital Surcharge Rule for Largest Banks

The Federal Reserve today voted to finalize a rule imposing capital surcharges on the largest U.S.-based global systemically important banks. The plan requires substantially higher capital levels for G-SIBs than those required by Basel III. The rule applies to the eight U.S. G-SIBs as designated by the Basel, Switzerland-based Financial Stability Board.

Banks subject to the rule would use the higher surcharge of two calculation methods. Based on current figures, surcharges on U.S. banks would range from 1 percent to 4.5 percent. In addition to the surcharges on G-SIBs, the rule would require U.S. banks with more than $50 billion in assets to calculate a measure of their potential significance. It phases in from Jan. 1, 2016 through the end of 2018.