On May 20, the Systemic Risk Council sent a letter to Senator David Vitter (R-LA), offering strong support for his amendment to the “Financial Regulatory Improvement Act of 2015”, which would strengthen equity capital requirements applicable to the largest financial institutions.
The letter states that the Council “has long supported stronger, simpler capital requirements for large, complex institutions, and we are gratified that you are moving forward with a proposal to do just that. There is widespread consensus that the use of excessive leverage by so-called “systemic” institutions was a key driver of the financial crisis and ensuing need for taxpayer bailouts. Though regulators have moved to strengthen bank leverage and risk-based capital standards since the crisis, the increases have been incremental and large financial institutions remain overly reliant on debt to fund themselves.”
Read the full letter below: