The Federal Reserve “Sets the Bank-size Bar Low” for Capital Requirements

THE WALL STREET JOURNAL, Friday, June 8, 2012

MONEY & INVESTING:  Capital Rule Is One Size Fits All, by Victoria McGrane, Matthias Rieker and Dan Fitzpatrick

WASHINGTON– “The federal Reserve shocked bankers Thursday by approving a proposal that would force even the smallest lenders to comply with the elaborate international bank-capital standards known as Basel III…

Setting the bank-size bar so low will mean ‘a real wake-up call’ for small banks, said Karen Shaw Petrou, managing partner of consultant Federal Financial Analytics Inc., Washington.”

Lowering the bar at a track event makes it less competitive. The runner or jumper does not have to jump as high over the bar when it is low as when it is high.

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