Fed extends comment period on capital buffer rule

WASHINGTON (Reuters) - The Federal Reserve has extended the comment period for its proposal on how much capital banks should hold as a buffer against a major credit meltdown, it said on Friday.

The central bank said the public now has until March 21 to comment on the proposal. Initially, comments were due by Feb. 19.

The Countercyclical Capital Buffer would raise the capital requirements for large banks when they face increased risks of losses. The buffer would then be available to help banks absorb shocks associated with declining credit conditions, the Fed said.

The current proposal covers the factors the Fed would take into account to set the buffer.

(Reporting by Lisa Lambert; Editing by Meredith Mazzilli)