Plans to force the largest banks to hold as much as 2.5% more capital would put them at a competitive disadvantage to smaller institutions.

Giant banks have been making such arguments for months in an effort to portray the surcharge as unfair and inappropriate. But even with it, they will still end up holding less capital as a percentage of assets than smaller banks.

That conclusion, grounded in years of bank capital data, should not come as a shock to most analysts or bankers. But in the debate over the surcharge for "systemically important financial institutions," it has largely been forgotten by both sides of the capital fight. Advocates for the rule hope that it will prompt big banks to shrink, and big banks have deplored it as discriminatory.

Surcharges "dictate that a loan to a given company should carry a different capital charge depending solely on who makes the loan," JPMorgan Chase's chief risk officer, Barry Zubrow, told the House Financial Services Committee in June. Using capital requirements as "a mechanism for competitive change … would be an extraordinarily unwise step to take."

Yet such inequality may already be baked into the system — in big banks' favor. Though current capital requirements are nominally the same for all banks, the biggest banks have long operated near minimum capital levels while smaller ones have had thicker cushions. "Small banks have always been required to have higher capital levels than the big banks," Rochdale Securities analyst Richard Bove said by email. "The new rules seek to change that relationship, forcing the big banks to have higher ratios."

Still, given that capital levels are 3 percentage points lower at the average bank with assets above $50 billion compared with smaller banks, even the maximum 2.5% surcharge will not necessarily even out the historical capital gap.

(International regulators warned they could assess a 1% extra surcharge if big banks continue to grow bigger, but the odds of that happening are unclear. A proposal by Federal Reserve Gov. Daniel Tarullo would have forced the largest banks to carry double the capital that Basel III would require, but it is no longer on the table.)

There is little evidence to suggest that the response to the financial crisis has changed matters, either. SNL Financial data shows that even as large banks have built up their capital position in anticipation of a surcharge, smaller banks have built up every bit as fast. For banks with assets of less than $50 billion, Tier 1 capital averages between 17% and 19% of risk-adjusted assets. Those above $50 billion average less than 14%.

Bankers and analysts have long debated the reasons for the gap. In some instances it may be chalked up to small-bank conservatism or a lack of good outlets for capital. But some say much of it stems from regulators' practice of tacitly letting big banks run near capital limits while demanding smaller ones maintain a large buffer.

The problem is that regulators are more lenient when dealing with "an 800-pound gorilla than they are with 50 monkeys," said Mike Moebs, founder of the banking research firm Moebs Services. When it comes to supervising smaller banks, "Field examiners say, 'Jesus, I'm overworked, and I'm just going to enforce the strictest rules possible.' That's the mentality you have to deal with."

Chris Cole, the chief regulatory counsel for the Independent Community Bankers of America, agreed. Even with a 2.5% surcharge, "there will still be an advantage for big banks. It will just be less than it used to."

What might be called the "small-bank surcharge" is normally an unspoken affair. But it can sometimes be quantified in regulators' consent orders, Cole and other industry advocates said. Joe Brannen, president and chief executive of the Georgia Bankers Association, points to a recent order by the Office of the Comptroller of the Currency for Cherokee Bank in Canton, Ga., which just completed a capital raise. Under its terms, Cherokee must maintain a 12% Tier 1 capital ratio, well above official minimums. "Those are the ones we look at and just scratch our heads," Brannen said.

An OCC representative did not respond to a request for comment.