Banking regulators set bank capital minimums.
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The Comptroller of the Currency and the Federal Deposit Insurance Corp. issued final rules raising capital requirements for all federally regulated banks. From now on, banks must maintain 6% of assets in total capital--which includes shareholders’ equity in common and preferred stock, retained earnings, reserves for bad loans and certain types of subordinated debt. Capital requirements are imposed to ensure that sufficient equity exists to protect against large losses.
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