U.S. banking giants may take up to four years to set aside profits to meet new capital rules, according to a report by Morgan Stanley.
would be able to fund the anticipated capital raises in less than two years, according to the Morgan Stanley calculations. JPMorgan declined to comment, while Bank of America did not immediately respond to requests for comment.
Most of the need to raise capital would come from assessments of the bank's operational risks and their trading books. Morgan Stanley's predictions show a larger impact from the rules than those predicted by Federal Reserve Vice Chair Michael Barr,earlier this month he anticipated banks would need two years of retained earnings to catch up to the new standards.
The Federal Reserve and the Federal Deposit Insurance Corporation are expected to announce a proposal to implement the Basel III accord on Thursday, which will be followed by a public comment period. Reporting by Tatiana Bautzer in New York and Pete Schroeder in Washington; Editing by Lananh Nguyen and Chris ReeseCovers financial regulation and policy out of the Reuters Washington bureau, with a specific focus on banking regulators. Has covered economic and financial policy in the U.S. capital for 15 years. Previous experience includes roles at The Hill newspaper and The Wall Street Journal.
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