Federal Reserve Issues Haunting Warning To 8 Biggest US Banks…Collapse Could Be Near
Randy DeSoto
WesternJournalism.com
July 24, 2015
The Federal Reserve voted on Monday to direct the eight largest U.S. banks to increase their capital levels, causing many to speculate what it is seeing on the economic horizon.
The Associated Press reports that the Fed is ordering the banks to keep their capital balance sheets “above industry requirements to cushion against unexpected losses and reduce the chances of future taxpayer bailouts.”
The move sent social media buzzing about the Fed seeing the possibility of financial turbulence ahead.
“We should pay close attention to what the Federal Reserve is doing,” Peter Reagan, financial market strategist at Birch Gold Group, said. “The Fed’s order to increase cash reserves even more than was required by Dodd-Frank, indicates it sees vulnerability and possibly extreme economic conditions on the horizon.”
“Even with these increases, the amount banks are required to keep on-hand is extremely low by historic standards.”
Just recently, we warned that the people of Greece have learned first hand what it means when the banks run out of cash reserves.
Banks subject to higher levels of capital requirements include JPMorgan Chase, Citigroup and Bank of America, Goldman Sachs, Wells Fargo, Morgan Stanley, Bank of New York Mellon and State Street Bank. The combined total these banks are now mandated to keep in capital above current industry requirements is approximately $200 billion, which happens to be the amount the Treasury Department poured into the banking system during the financial crisis in the fall of 2008.
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