Big banks face huge shortfall under new rules

Washington

BANKING behemoths led by HSBC Holdings Plc and JPMorgan Chase & Co now know the cost they'll have to shoulder so the global financial system doesn't have another Lehman moment.

The Financial Stability Board, created by the Group of 20 nations in the aftermath of the crisis, published its plan for tackling banks seen as too big to fail. The most systemically important lenders must have total loss-absorbing capacity equivalent to at least 16 per cent of risk-weighted assets in 2019, rising to 18 per cent in 2022, the FSB said on Monday. A leverage ratio requirement will also be imposed, rising from 6 per cent initially to 6.75 per cent. Bloomberg reported these numbers on Oct 2.