Dec
10

Funding Fee

tobigtofailIn a shrewd move the Fed will impose added capital requirements on the nation’s biggest banks. The additional capital will penalize banks that rely heavily on short-term funding. This will force these banks to hold more capital and reduce their profitability, or shrink and escape the requirement. Either way, it reduces both the funding advantage these banks have over small ones and the likelihood of a big taxpayer bailout.

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