Why America’s banks need more capital

AMERICA SPENT more than a decade trying to make its banks safer, only for several of them to suddenly earlier this year. So it is no surprise that are trying once again to shore up the system. Their latest proposals would on average increase by 16% the amount of high-quality equity capital banks would need to fund their operations, among a litany of other changes designed to bring America’s rules in line with principles agreed globally. If the package—dubbed the “Basel 3 endgame”—is implemented, banks, which have been reporting their profits over the past week, will have to spend years building up their safety buffers.Bankers are furious. “What person in what ivory tower thinks that is a rational thing to do?” asked Jamie Dimon, the boss of , of one of the rule changes last month. Some of the industry’s complaints about the details are reasonable. Overall, however, the increased safety brought about by more capital is worth the costs.