FDIC’s Hoenig praises latest proposed capital requirements

Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corporation, has praised the more stringent capital requirements that have been proposed for the largest lending institutions in the United States on July 9.

Hoenig, who has been a very outspoken critic of the emphasis that the Basel III capital requirements have placed on the risk weighting of assets, stated that the latest proposals, which are more simplistic in their nature, will do a far better job in bolstering risk management, according to The New York Times.

"This will increase the overall financial stability of the system," he stated, the media outlet reports. "This is an advantage to the banks over the long run, and to the economy. I am confident of that."

At the recent board meeting held by the FDIC, the government official stated that a leverage ratio is needed to assure the broader financial community that the Basel III capital requirement will do their job in terms of managing the risk that exists in the global banking system, according to The Los Angeles Times. 

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