Bankers agree on plan to increase capital buffers
NEW YORK (AP) — Regulators are proposing new rules that would require the world's largest banks to hold more money in reserve. The goal is to make it harder for them to fail and cause another global financial crisis.
The new rules would require major banks to hold an extra 1 percent to 2.5 percent of capital on their balance sheets, depending on their size. The extra reserves would be in addition to the 7 percent cash buffer that all banks have to have.
The goal is to prevent another shock like the one that occurred in 2008 when Lehman Brothers collapsed.
The rules were proposed Saturday by the Bank for International Settlements, an umbrella organization of the world's central banks.
Banks would have until the end of 2018 to meet the new requirements.