An important capital policy initiative that has yet to be completed pertains to additional capital requirements for systemically important financial institutions (SIFIs). Section 165 of the Dodd-Frank Act directs the Federal Reserve to impose enhanced prudential standards, including capital requirements, on bank holding companies with consolidated assets of $ billion or more.
These requirements must be more stringent than those for firms that do not pose a similar risk to U.S. financial stability, and must increase in stringency based on the systemic footprint of the firm. Last year, we proposed development of a comparable enhanced international capital requirement for SIFIs.