Major banks are facing one of the biggest regulatory overhauls since the 2008 financial crisis, setting up a clash over the amount of capital they must set aside to weather a storm. The US Federal Reserve’s top banking regulator, Michael Barr, said he wants banks to start using a standardized approach for estimating credit, operational and trading risks, rather than relying on their estimates. He also said the Fed’s annual stress tests should be modified to better capture dangers that firms can face. The plans laid out by Barr on Monday follow a months-long review of capital requirements, a politically sensitive topic that became a lighting rod after several regional lenders collapsed this year. Barr said his examination found that, although the current system was generally sound, changes were needed that will result in banks setting aside more money to protect against losses.
Turkish officials did a sudden about-face Monday, saying the government will ask parliament to advance Sweden’s bid for membership in the NATO alliance after receiving assurances on key demands. The flip, after months of withholding assent, paves the way for Swedish accession, which in turn would cement the massive geopolitical blowback engendered by Vladimir Putin’s invasion on Ukraine.
