US Bank Shares Drop Amid Treasury Debt Issuance and Capital Requirement Proposals.

Shares of US banks fell on Monday amid concerns that a flood of Treasury bill issuance following the raising of the US debt ceiling would drain liquidity from lenders. The US government is expected to issue $1tn or more of short-term debt to replenish its Treasury General Account (TGA) or cash reserves that were depleted during the political haggling over the debt ceiling. U.S. regulators, led by the Federal Reserve, are also expected to propose this month increasing average bank capital requirements by as much as 20%.