Federal Reserve announces their Final Capital Requirements for All Large Banks Effective October 1, 2024

More Gold Backing to compete with BRICS Gold backed Currency

copy of press release:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240828a.htm

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Just about a month ago we predicted that the US was not just going to sit back and allow BRICS to roll over them with their new Gold backed BRICS methods (designed to compete with US dollar)

Here we go,

The Federal Reserve Board is on the verge of finalizing individual capital requirements for large banks. These 'New requirements' are not just another set of rules, but intended to keep US dollar stronger against BRICS. They are set to take effect on October 1, 2024.

The 'New' Capital requirements, crucial for the stability of the banking sector, are heavily influenced by the stress test results from earlier in the year.

Standard equity tier 1 capital requirements includes:

• Minimum 4.5% requirement for all banks

• Stress capital buffer of at least 2.5%

• Potential capital surcharge for largest and most complex banks

• Banks falling below requirements face automatic restrictions on capital distributions and bonuses

• Goldman Sachs' stress capital buffer adjusted to 6.2% from 6.4% after reconsideration request

• Federal Reserve Board committed to improving stress testing framework

Additional Notes:

Earlier this year, the US Banks underwent several stress tests to determine the capital requirements for compliance under a Basel III regimen.

The large banks are required to fulfill these guidelines.

Gold is included in the Basel III bank capital requirements as a Tier 1 asset:

• The Basel III accord, implemented in 2019, requires banks to hold a significant portion of their capital in high-quality assets, including gold.

• Tier 1 capital is the most basic tier and measures a financial institution's financial strength.

• It includes equity and common stock.

• Allocated gold is considered a Tier 1 asset and has zero risk weighting.

• This is because allocated gold is not considered part of the custodian bank's balance sheet.

• Unallocated gold Unallocated gold is considered a Tier 3 asset and is subject to an 85% Required Stable Funding (RSF) ratio.

• Purpose The Basel III reforms were designed to enhance banking stability and reduce the likelihood of defaults during economic downturns.

• This means that on October 1, our large Banks will hold gold as Reserves, considered a high-quality asset.

• Furthermore, it means that these Banks will be capable of utilizing sound money.

• In other words, our large Banks will be subject to utilizing hard currency such as gold as money.

• A Gold Standard is a financial system in which the value of a country's currency is fixed in relation to a specific amount of gold or linked to the currency of a country that does so.

• We have been given the Tier 1 guidelines that our large Banks will be using, and they are as follows:

• The minimum capital requirement, which is the same for each bank and is 4.5 percent;

• The stress capital buffer requirement, which is based in part on the stress test results and is at least 2.5 percent;

• And, if applicable, a capital surcharge for the largest and most complex banks, which is updated in the first quarter of each year to account for each bank's overall systemic risk.

• These new guidelines are intended to allow US to become competitive with other countries in trade, such as the BRICS System.

Our big Banks work with our markets the most, and these new protocols will allow them to meet the new standards being applied in global trade. - from Federal Reserve

• As these new banking guidelines go into effect on October 1, our banking system will learn to fulfill new obligations between themselves and their clients.

• From that point forward, we will have a new form of liquidity that will enable us to adapt to the changes in our global economy.