Daniel K. Tarullo, the Fed governor overseeing regulatory policies, testified before the Senate Banking Committee on Tuesday and signaled the central bank’s intent to increase special capital requirements for the largest banks to 11.5 percent.  The Fed's plans are more conservative than new international regulations that require 9.5 percent reserves.  The eight banks currently deemed globally significant and therefore subject to the requirements are: Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo.   The market reacted negatively to the news, dropping the stock price of the institutions. 

Even if banking regulations aren't in your immediate wheel house of interest, an increase in reserves of 3% means about 17B for a bank like Goldman which would pad its reserve through measures like selling stock, holding on to profits or cutting its business operations.  The impact of these regulations could be felt all areas of business (perhaps why these particular banks are considered to be globally significant institutions). These changes will certain spark a lot of debate both in the academic and the practice worlds.

-Anne Tucker