On Thursday, two top Fed officials announced tough new requirements for the eight largest American banks, opening a new front in the Fed's regulatory regime. The measures would force big banks to "fully internalize the risk" they pose to the financial system, Fed Gov. Jerome Powell said.

"I have not reached any conclusion that a particular bank needs to be broken up or anything like that," Powell told attendees at a banking conference, according to the Wall Street Journal. Rather, the Fed would add pressure to financial institutions "to the point at which it becomes a question that banks have to ask themselves."


What the Fed is intending to do, according to Powell and fellow Fed Gov. Daniel Tarullo, is increase the level of capital big banks must hold to pass their stress tests, annual reviews by financial regulators of major banks' ability to withstand a crisis.

"This will be a significant increase in capital," Tarullo told Bloomberg, indicating that the new requirements will be phased in over several years. "We need to have those eight most systemically important institutions more resilient than other banks in the economy."

The new requirements would apply to banks deemed global systemically important financial institutions: JPMorgan, Citigroup, Bank of America, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, State Street and Wells Fargo.

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