Fed moves to strengthen limits on bank size

The Fed today releases for comment a proposed rule prohibiting a financial company from merging with another if their combination's liabilities would exceed 10% of the total of all financial companies.

The move is another step in implementing the intent of the Dodd-Frank financial reform act. Comments are due by July 8.

Only JPMorgan (JPM +0.5%), Bank of America (BAC +0.6%), Citigroup (C +0.7%), and Wells Fargo (WFC -0.2%) would be affected - at least in the short term - says the Financial Stability Oversight Council.

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Comments (13)
  • The Retired one
    , contributor
    Comments (185) | Send Message
    Knowing this requirement the
    "to big to fail banks" have been given notice and have the ability to adjust and comply prior to any pending Merger.
    It's about time someone does something before the next potential crisis occurs.
    Just saying!
    8 May 2014, 03:31 PM Reply Like
  • MatchlessGlory
    , contributor
    Comments (37) | Send Message
    If only our Federal Government had someone to keep them in check.. (cause the voters don't seem to care)
    8 May 2014, 03:34 PM Reply Like
  • gwynfryn
    , contributor
    Comments (6460) | Send Message
    Make that "certain" rather than "potential". It is already overdue, maybe because, in many sectors, there hasn't really been a recovery from the previous one...
    10 May 2014, 11:26 AM Reply Like
  • James Myung
    , contributor
    Comments (496) | Send Message
    This sounds to me the Fed is preventing smaller banks to be like the "to big to fail banks", providing competitive advantages for the banks that are already "to big to fail banks".
    8 May 2014, 04:43 PM Reply Like
  • Jason B
    , contributor
    Comments (582) | Send Message
    Sweet. I would love that.
    8 May 2014, 07:20 PM Reply Like
  • gwynfryn
    , contributor
    Comments (6460) | Send Message
    They should have made it 1%, then!
    10 May 2014, 11:27 AM Reply Like
  • DoowopDave
    , contributor
    Comments (253) | Send Message
    This is no big deal. BAC has been shrinking as it moves to focus on it's core businesses anyway.
    8 May 2014, 05:15 PM Reply Like
  • pouellet
    , contributor
    Comments (241) | Send Message
    The Federal Government is largely to blame for the large banks. Every financial crisis the FDIC goes begging for strong financial institution to buy the financial institution that are failing.
    The savings and loan crisis in the 1990's and the 2008 crisis are the latest examples. Who could have taken the large financial institution that we're failing in 2008 except for the large banks.
    8 May 2014, 05:41 PM Reply Like
  • jak279
    , contributor
    Comments (11) | Send Message
    I'm guessing there are exemptions in there for the "next time" they need to go begging for someone to take over a Washington Mutual or Merrill Lynch?
    8 May 2014, 07:03 PM Reply Like
  • spinrbait
    , contributor
    Comments (678) | Send Message
    i don't see any banks ever doing that again. fool me once, shame on you, fool me twice, shame on me.
    9 May 2014, 08:29 AM Reply Like
  • Jason B
    , contributor
    Comments (582) | Send Message
    Ironic since the Fed and USG were the ones that forced these banks to merge in the first place. Ironic that they forced BAC to take ML, CW etc...then turns around and sues them for billions for doing so.
    8 May 2014, 07:21 PM Reply Like
  • Tschurin
    , contributor
    Comments (381) | Send Message
    I'm wondering whether the fact that they use a nice round number like 10% is an indication that the Fed doesn't have an actual understanding of what the right number should be.
    8 May 2014, 10:04 PM Reply Like
  • gwynfryn
    , contributor
    Comments (6460) | Send Message
    My thinking too, Ts! It also seems to mean they want us to end up with just ten mega banks in the US, which is a nice number for a conspiracy, too. They should have made it 2% or less, as corralling and coordinating fifty banks is a much tougher proposition.
    10 May 2014, 11:31 AM Reply Like
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