US regulators reconsider capital hike for big banks, WSJ reports

The Federal Reserve and two other U.S. regulators are moving toward a new plan that would significantly reduce a nearly 20% mandated increase in capital for the country's biggest banks following lobbying efforts by industry CEOs like JPMorgan Chase's JPM Jamie Dimon, the Wall Street Journal reported on Sunday.

Required increases in capital for banks like JPMorgan and Goldman Sachs meant to ensure they have sufficient buffers to absorb potential losses — would on average be about half as much as originally floated, the Journal added.

Top officials from all three agencies involved in the pending capital rules — the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency — are still discussing substantive and technical revisions and there is no guarantee that an agreement will be reached, the WSJ reported.

The Fed, FDIC and OCC declined to comment on the report.

The three bank regulators, led by the Fed, in July last year unveiled a proposal to overhaul how banks with more than $100 billion in assets calculate the cash they must set aside to absorb potential losses.

The Basel proposal aims to make banks more resilient to potential losses, lowering the risk of failures or bailouts. Banks say that they are already highly capitalized and the changes are unnecessary.

Big U.S. banks have lobbied against the Basel proposal, which they say will force them to overhaul or shut down a range of products and businesses.

Goldman Sachs GS recruited dozens of small business owners to travel to Washington and urge lawmakers to reconsider the proposal, a Reuters review of private Goldman documents, interviews with program participants and public disclosures show.