WASHINGTON – Federal regulators are requiring big banks to keep enough high-quality assets on hand to survive during a severe downturn, the latest move under congressional mandate to lessen the likelihood of another financial meltdown.
The Federal Reserve adopted rules on a 5-0 vote Wednesday that will subject big U.S. banks for the first time to requirements. The Federal Deposit Insurance Corp. and the Treasury Department’s Office of the Comptroller of the Currency adopted the rules later in the day.
Comptroller Thomas Curry, who also is a member of the FDIC board, said the new requirements “will help ensure that a banking organization’s cash resources, and not taxpayers’ money, will provide the support necessary for it to withstand short-term funding stress.”
The 15 largest banks – those with more than $250 billion in assets – will have to hold enough cash, government bonds and other high-quality assets to fund operations for 30 days during a time of market stress. Smaller banks – those with more than $50 billion but less than $250 billion in assets – will have to keep enough to cover 21 days.
Economy stronger in all regions of US
The U.S. economy strengthened in all regions of the country in July and August, in areas from consumer spending to auto sales to tourism, the Federal Reserve reported in a survey released Wednesday.
All 12 of the Fed’s regions reported growth. Six – New York, Cleveland, Chicago, Minneapolis, Dallas and San Francisco – characterized growth as “moderate.” The other regions reported somewhat slower expansion. Four described growth as “modest,” and two noted signs of improvement.
The survey found no clear evidence that the economy is expanding so fast that the Fed might soon need to begin raising interest rates to prevent inflation.
Samsung announces new Galaxy phones
Apple shares are getting bit by a rival.
The iPhone maker’s stock fell more than 3 percent Wednesday after Samsung unveiled two new smartphones at a trade show in Berlin.
Samsung announced the Galaxy Note Edge phone, which has a side display for quicker access to Twitter, the flashlight, news and other apps. It also showed off a new Galaxy Note 4 phone and a virtual-reality headset for the phone called Gear VR.
The Samsung unveiling comes less than a week before Apple is expected to reveal its new products, next Tuesday in Cuppertino, California. A larger iPhone, and possibly a computerized watch, are expected.
Google, AbbVie join in health initiative
Google’s ambitious health startup is teaming up with biotechnology drugmaker AbbVie in a $500 million joint venture that will try to develop new ways to treat cancer and other diseases such as Alzheimer’s.
The alliance announced Wednesday calls for Google Inc. and AbbVie Inc. to each invest $250 million in the project. They will split all expenses and any profits generated by the venture.
Calico, a company created by Google last year, will manage a team of scientists who will work at a research-and-development lab in the San Francisco Bay Area.