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Our Take on Post-Crisis Capital Requirements for Banks

Here's our best guess about future capital requirements and the impact on the Big Four U.S. banks.

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Early signs of a recovery are starting to show in the banking industry's recent quarterly reports, suggesting the worst may finally be over. With the threat of a complete collapse of the United States banking industry retreating and bottom lines improving, investors are starting to look at the long run (a view they should have stuck to all along, in our opinion). Several questions linger, but the one that has us up at night is about regulation: What will the regulatory environment look like in another year or two?

While the Federal Reserve, FDIC, Office of the Comptroller of the Currency, Office of Thrift Supervision, Congress, the Treasury Department, and state bank regulators battle over who will ultimately regulate our banking system, we are more concerned with what those regulations will entail. What will the new capital levels be, and how will this affect shareholder returns?

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Jaime Peters does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.