U.S. Stocks Pare Gains on Report of Basel Surcharge Proposal
June 16 (Bloomberg) -- U.S. stocks pared gains as people familiar with the mater said international financial supervisors are considering capital surcharges of as much as 3.5 percentage points on the largest banks if they grow bigger.
The Standard & Poor’s 500 Index rose 0.1 percent to 1,266.90 at 1:40 p.m. in New York after rallying as much as 0.7 percent earlier. Financial shares in the index were little changed, erasing a rally of as much as 1.1 percent. the talks.
Draft plans circulated before a meeting next week of the Basel Committee on Banking Supervision would subject banks to a sliding scale depending on their size and links to other lenders, said the people, who declined to be identified because the proposals aren’t public. Banks wouldn’t initially face the highest surcharge, which is intended as a deterrent to expansion, one person said. The largest banks may face a 3 percentage point levy at their current sizes, the person said.
--With assitance from Jim Brunsden in Brussels.
To contact the editor responsible for this story: Michael Regan at email@example.com