Capital has doubled in the American banking system in the last five years. This will make the American banking system the safest and best-capitalized in the world.
The requirement could have the effect of causing banks to reduce their balance sheets in order to meet the new standard, Keating cautioned. The alternative to shrinking, however, is finding more investment, and Keating expressed his optimism that the underlying strength of the U.S. banking system will help banks attract investment and meet the leverage ratio.
Watch the interview.