Federal Reserve On Verge Of Proposing New Capital Rules For Banks

The Federal Reserve is expected to roll out new rules soon that could make big banks keep more capital reserves on hand, presumably leaving them with less money to lend. The idea is to make banks act more responsible with their stacks of chips and not need the government to bail them out.

CNNMoney reports the Fed’s proposed rules will apply to 31 banks that boast more than $50 billion in assets.

CNN’s sources say the announcement will come this week and could go into effect next year. Larger required cushions are expected to make banks behave more conservatively and hopefully stave off a future financial crisis. Big banks will argue a tighter loan market will put the hurt on business growth, stifling the economy.

Fed close to new financial buffers for banks [CNNMoney]