Comments for Legislation will drive small banks out of business at http://www.ababj.com , comment 0 to 1 out of 1 comments http://www.ababj.com Wed, 19 Jun 2013 15:19:49 +0100 FeedCreator 1.7.2 http://www.ababj.com/briefing/legislation-will-drive-small-banks-out-of-business.html#pc_537 I agree with you that smaller banks will be forced to raise capital and that the unintended consequence will likely be that many small banks will sell or merge. The IMF report released on July 30, 2010 will add momentum to this push among policymakers to increase capital. The report estimated that small and regional banks would need $40.5 - $76.3 billion in additional capital. In my opinion, that level of capital cannot be raised unless investors believe that they will receive a high return on their investment from the sale of the bank. One point of clarification: my understanding is that the requirement of an annual stress test applies only to financial institutions with more than $10.0 billion in total assets. Regardless, the dynamics you describe will still apply to those institutions that aren’t subject to an explicit stress test. - Claude Hanley Tue, 03 Aug 2010 09:32:12 +0100