The new capital requirements are likely to be proposed formally later this year and won’t be expected to take effect before 2018. Nevertheless, banks will have to start adjusting their balance sheets sooner to phase in the changes.
“That’s not good for us,” J.P. Morgan Chase & Co. Chief Executive Officer James Dimon said. “Hopefully we’ll be able to adjust. We put a lot of power, money, people on to get these things right as we modify our business practices to meet the new rules.”
Current rules require banks during normal times to maintain an additional capital buffer of 3.5% in certain assets. The requirement was previously 4.5% before the firm made moves to shrink in size over the past year. Any further regulation could also force other big banks to shrink in size instead of meeting the higher capital requirements.
Financial Select Sector SPDR
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