Banks and financial sector exchange traded funds may have one hand tied behind their back as the Federal Reserve finalizes additional capital requirements on Wall Street.

The Fed has placed a higher capital requirement for the eight largest banks, including a 4.5% capital “surcharge” for J.P. Morgan Chase (NYSE: JPM); 3.5% for Citigroup (NYSE: C); 3% for Bank of America (NYSE: BAC), Goldman Sachs Group (NYSE: GS) and Morgan Stanley (NYSE: MS); 2% for Wells Fargo (NYSE: WFC); 1.5% for State Street (NYSE: STT); and 1% for Bank of New York Mellon Corp. (NYSE: BK), reports Victoria McGrane for the Wall Street Journal.

The new surcharge comes on top of a base 7% common-equity capital requirement.

A number of large-cap financial ETFs include heavy tilts toward these companies. For instance, the SPDR S&P Bank ETF (NYSEArca: KBE) includes JPM 1.6%, C 1.6%, BAC  1.6%, WFC 1.6% and BK 1.5%. The Financial Select Sector SPDR (NYSEArca: XLF) holds WFC 8.6%, JPM 8.2%, BAC 6.0%, C 5.7%, GS 2.7%, MS 2.0%, STT 1.0% and BK 1.5.%.

J.P. Morgan was about $21 billion short of its required target as of December. The other banks currently hold enough capital to meet the requirement.

The surcharge can grow or shrink based on a bank’s changes in size, complexity and entanglements with other large firms. The excess capital helps diminish a company’s risk profile and provide a capital buffer in case of another financial crisis.