On the face of it, most big US banks have amassed enough capital to satisfy Basel III. On Tuesday, the Federal Reserve released details of the new capital rules, which will be implemented in January. Banks need to hold a minimum ratio of 7 per cent core tier one equity to risk-weighted assets, phased in over five years. Those active internationally have to hold an extra buffer of up to 2.5 per cent of RWAs. The worst crisis-hit banks, such as Bank of America and Citigroup, are already more or less there. JPMorgan and Wells Fargo are only a bit shy, with 8.9 and 8.4 per cent, respectively.

Should investors be comforted? These are still extremely geared businesses – and who knows what the next crisis will look like. What can be said, however, is that these banks would at least have survived the last crisis. Citi, for example, wrote down a total of $140bn between 2007 and 2009. It now has $157bn of tangible common equity. Sure, it has only $110bn in Basel III capital, but do not forget that its balance sheet is 15 per cent smaller than it was before the crisis.

Furthermore, these same large banks also have the required 4 per cent leverage ratios. In this case, banks with overseas exposure will be subject to a separate minimum leverage ratio of 3 per cent, including off-balance sheet exposure, but this should not be a problem.