Fed, Treasury agree: Banks need to hold more capital

Author: Jamie Coleman | Category: News

Appearing before the Senate Banking committee, Treasury’s Brainard and the Fed’s Tarullo both called for banks to hold more capital.

These are unremarkable comments but with the focus on European stress tests this week (they are more like “mildly uncomfortable tests”, in my opinion), traders are more focused on banking issues than normal. Skepticism toward the stress tests are seen as a major factor in the euro decline today.

Markets remain are choppy this morning. This is no surprise given the sharp reversal of fortune in EUR/USD earlier today. traders remain skittish and are committing little precious bank capital to the markets today.

EUR/USD has eased to 1.2878 while cable has jumped to 1.5220 on short-covering.