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DS News Webcast: Tuesday 7/21/2015

The nation’s top eight banks will be held to minimum capital holdings or face stiff surcharges, according to a decision made by the Federal Reserve on Monday. The ruling establishes minimum holdings among what the Fed dubs global systemically important banks, or GSIBs, the firms with the most risk-based endeavors. Monday’s ruling is designed to reduce the risk of banking bloat by encouraging the elite eight to reduce their risk profile and size.

The GSIBs, according to the Fed’s criteria are: Bank of America; Bank of New York Mellon; Citigroup; Goldman Sachs; JPMorgan Chase; Morgan Stanley; State Street; and Wells Fargo. JPMorgan Chase faces the largest potential surcharge of 4.5 percent of its risk-based capital. The remaining seven would face surcharges between 1 and 3.5 percent of each firm's total risk-weighted assets.

Morgan Stanley net revenues reached 9 point 7 billion dollars for the second quarter ending, compared with 9 point 9 billion dollars in the first quarter of 2015 and 8 point 6 billion dollars a year ago, according to the company’s second quarter earnings statement released Monday. Morgan Stanley noted that their revenues for the second quarter reflect robust performance in equity sales and trading, strong results in investment banking, continued progress in fixed income, and commodities sales and trading.

About Author: Jordan Funderburk

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