The potential for an unprecedentedly large increase in residential mortgage capital requirements among big banks has recently been brought to the attention of the public. According to a Bloomberg report, these requirements, if implemented, could far exceed international standards.
The primary aim of the potential increased capital requirements is to protect consumers from risk associated with mortgages, with the additional capital being used to bolster economic stability regardless of market conditions. As well, in an effort to maintain a level playing field and enforce fairness, the large banks would end up being subject to higher levels of scrutiny than community banks.
Important Elements:
• Potential increased residential mortgage capital requirements for big banks
• Could far exceed international standards
• Aim to protect consumers from risk associated with mortgages
• Additional capital to be used to bolster economic stability
• Large banks would be subject to higher levels of scrutiny
You can read this full article at: https://www.housingwire.com/articles/rumored-basel-changes-could-hit-big-bank-mortgage-lending-bloomberg/(subscription required)
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