Minneapolis Fed Requests Comments On Plan To End "Too Big To Fail"

The Federal Reserve Bank of Minneapolis ("Minneapolis Fed") requested comments on its proposed " Minneapolis Plan to End Too Big to Fail" (the "Plan").

In the Plan, the Minneapolis Fed proposed:

• requiring covered banks to issue common equity equal to 23.5 percent of risk-weighted assets, with a corresponding leverage ratio of 15 percent, in order to "dramatically increase common equity capital" and "substantially reduce the chance of bailouts";
• calling on the U.S. Treasury Secretary to either certify that covered banks are no longer systemically important or subject those banks to an additional 5 percent of risk-weighted assets per year until (i) the Treasury certifies them as no longer systemically important, or (ii) the banks' capital reaches 38 percent, which the Minneapolis Fed reports is the "level of capital that reduces the 100-year chance of a crisis below 10 percent";