27 Too-Big-To-Fail Banks Face Capital Gap of Up to $870 Billion
Too big to fail banks can face a $870 billion capital gap, as regulator demand may increase holdings of debt securities to cover losses should the banks go under.
Too-big-to-fail banks can face a $870 billion capital gap, as regulator demand may increase holdings of debt securities to cover losses should the banks go under. Shortfalls facing 27 of the world’s largest banks could be in a range of $870 to $237 billion, according to estimates from AllianceBernstein. JPMorgan and Wells Fargo Co., may need to raise $127 billion to reach 18% of risk weighted assets, while BNP Paribas SA and HSBC may have shortfalls of $50 billion to $100 billion each. The range is so wide because proposals from the Basel-based Financial Stability Board outline various possibilities for the amount lenders need to have available as a portion of risk-weighted assets.
