US regulators Tuesday unveiled tough new capital requirements for the nation\'s eight largest banks in the newest move to strengthen the financial system in the wake of the 2008 crisis. The proposed capital minimums are intended to reduce risk throughout the system and address the so-called \"too big to fail\" problem, in which the government could be forced into a rescue when giant institutions founder. But banks said the new requirements would put them at a disadvantage with foreign competitors subject to lower capital standards. The rules pertain to bank holding companies with more than $700 billion in consolidated total assets or $10 trillion in assets under custody. The banks affected by the higher requirements are: Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, State Street, Wells Fargo and the Bank of New York Mellon Corp. Under the new rules, developed jointly by the Federal Reserve, the Federal Deposit Insurance Corporation,and the Office of the Comptroller on the Currency, the parent companies of the largest banks would have to maintain capital of five percent of their total assets, compared with three percent for smaller banks. The requirement would be six percent for the companies\' banking units. The standards are higher than the three percent requirement under the Basel III international pact on bank capital and reserve standards. Martin Gruenberg, chairman of the FDIC, said the higher capital requirements were needed because a three percent ratio would not have prevented the unsafe growth in leverage among big banks in the years preceding the 2008 financial crisis. The greater requirements would place additional private capital at risk before public funds would be used, Gruenberg said. \"Maintenance of a strong base of capital at the largest, most systemically important institutions is particularly important because capital shortfalls at these institutions can contribute to systemic distress and can have material adverse economic effects,\" Gruenberg said. Frank Keating, president of the American Banking Association, criticized the measure for imposing stiffer requirements on large American banks compared with their foreign counterparts. \"Raising capital is not without cost - it means higher funding costs for loans and that fewer loans will be made,\" Keating said in a statement. \"Doubling the capital requirements adds little protection, and may adversely affect the level and cost of credit that\'s so vital to continued economic expansion.\"