Newsletter October 2011: Only modest impact seen from big bank capital surcharge

The capital surcharge to be imposed on the world’s biggest banks is likely to have, at most, only a modest impact on aggregate economic output, according to a new study undertaken by regulators. This conclusion sharply contradicts the drumbeat of dire predictions from top bankers, who fear the additional capital that global systemically important banks (G-SIBs) will be required to hold by 2019 will hinder their lending and undermine the recover from recession.