The Federal Reserve Board approved new capital...

The Federal Reserve Board approved new capital guidelines designed to push banks into safer investments or force them to put more of their stockholders’ money behind riskier activities. The Fed, by a 6-0 vote, approved the regulations, which reward institutions for directing their deposits into prudent investments such as government securities and home mortgages. Starting Dec. 31, 1990, banks will have to hold capital--representing the stockholders’ investment in the institution--of 7.25% of loans and other assets. The minimum will increase to 8% two years later. The current standard is 6%.