Key facts
- The commentary says Europe is considering whether to stop adding bank capital and possibly reduce it.
- It cites the 2023 collapse of Credit Suisse and failures of US regional banks including Silicon Valley Bank as exceptions to banking resilience.
- It says US regulators are removing a filter on unrealised bond losses from capital calculations, a change it says hands a 3-8% capital reduction to regional banks.
The article is a commentary piece that argues policy-makers should weigh whether to relax bank capital requirements. It notes that since 2008 regulators have sought to rebuild capital in the banking system, and that Europe is considering whether to stop adding capital and possibly reduce it. The author cites the 2023 collapse of Credit Suisse and the failures of US regional banks, including Silicon Valley Bank, as exceptions to the resilience shown by most banks through recent crises. The piece also mentions that US regulators are removing a filter that ignored unrealised losses on bond portfolios from capital calculations, a change it says hands a 3-8% capital reduction to regional banks. It lists geopolitical instability, populism, artificial intelligence companies carrying debt, and sovereign bond market volatility, including recent swings in French government bonds, as reasons to be cautious about relaxing capital standards. The article carries no publication date or dateline and is written as an opinion column rather than a news report.