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U.S. Megabanks Need Additional $869 BILLION In Cash To Meet Greenspan Target

Rolfe Winkler: Greenspan's Insanely High Capital Standard Could Help Regulators
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In his testimony before the Financial Crisis Inquiry Commission this week, Alan Greenspan suggested that Bear Stearns and Lehman Brothers would have survived the crisis with 15 percent equity capital. "Extrapolated across other major banks," Rolfe Winkler writes, "the 15% figure implies they'd have to raise nearly $900 billion, a truly stupendous figure."

But while 15 percent may be a difficult standard to meet, "regulators should err on the high side" nonetheless. And "in setting a very high bar, Greenspan may have done regulators a favor," Winkler argues, by giving "them cover to raise capital standards higher than they otherwise would."

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