IN BRIEF : Fed Tightens Bank Regulations
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WASHINGTON — The Federal Reserve Board adopted new capital requirements for U.S. banking companies today, part of a global effort to make banking safer.
The Fed board agreed by unanimous vote to require banks to maintain capital equal to at least 8% of assets by 1992, up from 6% currently.
Banks holding low-risk assets like government securities will have little difficulty meeting the new standard, Fed officials said.
Banks with risky loans, however, could be forced to sell assets to meet the guidelines. Analysts expect the new standards to compel some of the biggest banks to raise capital to protect against unexpected financial losses.
Most small and medium-sized banks will be less affected, according to Diane Casey of the Independent Bankers Assn. of America.
The guidelines, which begin to take effect at the end of 1990, will bring U.S. bank capital requirements in line with those of 11 other industrialized countries that earlier this year agreed to harmonize standards.
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