With higher capital and liquidity requirements for banks, U.S. economic and job growth can expect to take a hit, according to a study by Oxford Economics released by the Clearing House Association.
"Our study's findings clearly demonstrate the need for any regulatory program to be carefully structured to avoid any unintended consequences to economic growth and employment," says Adam Slater, senior economist at Oxford Economics.
The study finds there are three big factors that could affect bank behavior and the economy. These include higher capital levels that lead to growing bank lending rates, requirements to hold more liquid assets, and the reduction of risk-weighted assets to reach higher minimum capital ratios.
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