The capital rules have not had nearly as much impact on Main Street banking operations that focus on things like mortgages and small-business lending, encouraging banks to expand in those areas while they shrink their Wall Street divisions.The new requirements on capital and a closely related metric — leverage — have come in several waves and from different sources. The international organization of central banks, based in Basel, Switzerland, put out the so-called Basel III rules in 2011, demanding that the banks reach certain minimum capital levels by 2015, though the date has since been pushed back.Many central banks, including the Fed in the United States, have said that banks in their countries must hold even higher capital levels and need to satisfy the requirements sooner than the dates required by Basel III.In the last few months, the Fed has indicated that it will also require bigger, more interconnected banks to achieve higher capital levels than smaller ones.Because these new rules are expected to hit JPMorgan Chase particularly hard, some investors and analysts said recently that the bank might need to shrink to bring itself onto a level playing field with competitors.
via New Rules Spur a Humbling Overhaul of Wall St. Banks – NYTimes.com.