Fed's Barr Says Basel And GSIB Surcharge Re-Proposals Would Together Increase Capital For GSIBs By 9%, Original Plan Had Raised Their Capital By 19%; He Will Recommend Regulators Re-propose 'Basel Endgame' And Global Systemically Important Banks Surcharge Bank Capital Rules; Changes To Basel Re-Proposal Would Exempt Banks Under $250B In Assets From Most New Requirements Except For Recognizing Unrealized Gains And Losses Of Securities
Portfolio Pulse from Benzinga Newsdesk
The Federal Reserve's Michael Barr announced that the re-proposals for Basel and GSIB surcharge rules would increase capital for Global Systemically Important Banks (GSIBs) by 9%, compared to the original plan's 19% increase. Barr will recommend regulators re-propose the 'Basel Endgame' and GSIB surcharge rules. The changes would exempt banks with assets under $250 billion from most new requirements, except for recognizing unrealized gains and losses of securities.
September 10, 2024 | 2:01 pm
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NEGATIVE IMPACT
The re-proposals for Basel and GSIB surcharge rules could impact the SPDR S&P Bank ETF (KBE) as it includes GSIBs, which will see a 9% increase in capital requirements.
KBE includes GSIBs, which are directly affected by the proposed increase in capital requirements. This could lead to a short-term negative impact on the ETF as banks adjust to new regulations.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The Financial Select Sector SPDR Fund (XLF) may be affected by the re-proposals for Basel and GSIB surcharge rules, as it includes major financial institutions that are GSIBs.
XLF holds major financial institutions, including GSIBs, which will face increased capital requirements. This regulatory change could negatively impact the ETF in the short term.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70