Big banks take capital fight to Congress

America's biggest banks took their fight to prevent tougher capital rules to the US Congress yesterday. The banks' aim is to torpedo US and international plans that would impose significant extra capital requirements on the biggest institutions, so that the banks whose failure would have the biggest effects on the system are less likely to get into trouble.

The Securities Industry and Financial Markets Association, one of the most powerful banking lobby groups, told the House Financial Services Committee yesterday that "excessive capital charges make it more expensive for banks to lend money or provide liquidity to US businesses. The result inevitably will be higher cost of credit and less credit and less funding availability."

Barry Zubrow, JPMorgan's chief risk officer, added: "The regulatory pendulum clearly has now begun to swing to a point that risks hobbling our financial system and our economic growth."

Earlier in the hearing, regulators had defended the need for extra capital requirements.