Banks’ $118 Billion Buffer Likely Wiped Out by New Capital Rules

Wall Street’s biggest banks are preparing for new regulations that could erase almost all of the $118 billion in excess capital they squirreled away over the past decade, likely crimping shareholder buybacks for years to come.

The Federal Reserve and the Federal Deposit Insurance Corp. will vote on Thursday to propose the measures during two separate open meetings, marking the first hurdle in putting the US on track to adopt its final version of international banking standards known as the Basel III endgame. Ahead of the meetings, both regulators, along with the Office of the Comptroller of the Currency, plan ...