Some officials both at the Treasury Department and the Securities and

(E) to require all large and highly leveraged banks to decrease their debt and increase their asset base.............perfect parallelism

OA:E

IMO E:
to require all large and highly leveraged banks to decrease their debt and increase their asset base
iiism is maintained and removal of word should

Some officials both at the Treasury Department and the Securities and Exchange Commission recently said in off-the-record conversations that it may be a good idea [url]to require that all large and highly leveraged banks should decrease their debt and should increase their asset base.[/url]

(A) to require that all large and highly leveraged banks should decrease their debt and should increase their asset base
(B) requiring that all large and highly leveraged banks decrease their debt and increase their asset base
(C) to require of all large and highly leveraged banks the decreasing of debt and an increase in their asset base
(D) requiring that all large and highly leveraged banks to decrease their debt and to increase their asset base
(E) to require all large and highly leveraged banks to decrease their debt and increase their asset base

Some officials both at the Treasury Department and the Securities and Exchange Commission recently said in off-the-record conversations that it may be a good idea to require that all large and highly leveraged banks should decrease their debt and should increase their asset base.

In non-underling portion:
"both" is a bit compromised: both X and Y: X and Y have to be grammatically and logically parallel. And X here is a prepositional phrase while Y is a noun..

In underlying portion:
"require" can be subjunctive, in this case it should follow the formula: REQUIRE + THAT + BARE INFINITIVE (REQUIRE + THAT + SHOULD/WILL/TO INFINITIVE is not acceptable) - for this reason, A is wrong.
Or "require" can be to-verb: REQUIRE TO ...

I keep this one to compare with E: "it may be a good idea requiring" vs "it may be a good idea to require". I believe that the latter case wins. So eliminate B.

- "require of" is unidiomatic
- use of "to" infinitive is a violation of "subjunctive formula".

"require to" is an acceptable form, and "to decrease" and "increase " are parallel. Correct choice.

Ans (E)

I pick E

B and D are out because "requiring that..." is unidiomtic.
"should" is not favoured in GMAT, and "the decreasing" in C sounds awkward.

Correct answer: E

A: Incorrect. (A) incorrectly forms the subjunctive, which in this sentence would be formed as follows: "to require that ... DECREASE their debt ... and INCREASE their asset base." In order for (A) to be correct, "should" must be deleted.
B: Incorrect. Idiom error: "a good idea" must be followed by the infinitive form, "to require." (B), however, correctly forms the subjunctive.
C: Incorrect. Wordy/awkward. Further, (C) is not parallel: "the decreasing of debt ... and an increase in their asset base."
D: Incorrect. Idiom error, as in (B). Further, (D) incorrectly forms the subjunctive by including the full infinitives "to decrease" and "to increase," rather than simply "decrease" and "increase."
E: Correct. (E) avoids the subjunctive formation by removing "that" after "to require."

The right answer is option E.

Some officials both at the Treasury Department and the Securities and Exchange Commission recently said in off-the-record conversations that it may be a good idea to require that all large and highly leveraged banks should decrease their debt and should increase their asset base.

(A) to require that all large and highly leveraged banks should decrease their debt and should increase their asset base
should is not necessary. should decrease their debt should rather be to decrease their debt. Likewise should increase their assets should rather be to increase their assets.

(B) requiring that all large and highly leveraged banks decrease their debt and increase their asset base
requiring should rather be to require as to require expresses intent or purpose, which is in line with the meaning of the sentence.

(C) to require of all large and highly leveraged banks the decreasing of debt and an increase in their asset base
The preposition of is not required. In addition, the decreasing of debts and an increase in their asset base make the sentence not concise compared with option E.

(D) requiring that all large and highly leveraged banks to decrease their debt and to increase their asset base
to require is better in the context than requiring. There is no need to repeat to after and as the infinitive parallelism can be set off by the first to after bank.

(E) to require all large and highly leveraged banks to decrease their debt and increase their asset base
This is correct answer choice out of the lot. to require expresses intent and the parallelism is between decrease and increase is correct. This option is the most concise choice which retains the original meaning of the sentence.

Some officials both at the Treasury Department and the Securities and Exchange Commission recently said in off-the-record conversations that it may be a good idea to require that all large and highly leveraged banks should decrease their debt and should increase their asset base.

(A) to require that all large and highly leveraged banks should decrease their debt and should increase their asset base. Should is redundant. Wrong
(B) requiring that all large and highly leveraged banks decrease their debt and increase their asset base. requiring that is wrong
(C) to require of all large and highly leveraged banks the decreasing of debt and an increase in their asset base. decreasing and to increase not parallel.
(D) requiring that all large and highly leveraged banks to decrease their debt and to increase their asset base.requiring that is wrong
(E) to require all large and highly leveraged banks to decrease their debt and increase their asset base. Correct

OFFICIAL EXPLANATION

There are two main issues in this question.

(1) There are two actions that are being suggested and these should be parallel: (a) to decrease their debt (b) to increase their asset base.

(2) The use of the word should is redundant since the sentence (with the words require that) already carries the implication that banks need to take certain action.

A. the word should is redundant since the verb to require and the context of the sentence indicate that the suggested actions should be taken

B. the phrase it may be a good idea requiring that... is not correct as a verb (i.e., to require) is needed

C. the phrase the decreasing of debt and an increase is not parallel

D. the infinitive form of the verb to decrease cannot be used after requiring that all large and highly leveraged banks as it is awkward and not idiomatic

E. the phrase banks ... to decrease ... [to] increase is parallel since both verbs are used in the infinitive form (the second to is implied); the unnecessary word should is omitted