US EditionUS Regulators Unveil Plans to Ease Capital Rules for Big Banks
Proposals would lower capital requirements by up to 7.8% for smaller banks, freeing billions for lending and buybacks, with regulators aiming to balance safety and economic support.
- The Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency will approve the Basel draft Thursday morning and open it for public comment.
- Years of industry lobbying and political shifts have shaped the reversal as Wall Street banks campaigned to ease post-2008 rules, with Michael Barr earlier pushing a plan to hike capital by 20, but lenders influenced the process.
- Wall Street banks would see capital fall 4.8%, larger regional banks 5.2%, and banks below $100 billion in assets 7.8%, with the Fed also proposing GSIB surcharge tweaks on Thursday.
- Regulators say the changes could unleash billions for lending, dividends, and buybacks, while analysts at Morgan Stanley estimate large banks could free up US$100 billion in excess capital; Bowman states capital remains 'robust', but Barr plans to dissent.
- Critics warn the changes come as risks are rising, saying the proposals will weaken safeguards amid surging geopolitical and private credit risks, while Fed staff say they streamline the capital framework and KBW analyst Chris McGratty cautions 'the devil will be in the details'.
9 Articles
9 Articles
U.S. Regulators Propose More Lenient Capital Rules for Big Banks
America’s biggest banks will be allowed to hold billions of dollars less in capital on their books under a new proposal, a change officials say will free up their ability to lend and compete with private-credit firms and other rivals.
US Regulators Unveil Plans to Ease Capital Rules for Big Banks
Wall Street lending giants would get relaxed capital requirements under proposals unveiled by the Federal Reserve on Thursday, in a move that could potentially unleash billions of dollars for lending, share buybacks and dividends.
Wall Street banks set for 5% capital decline under new rules
Wall Street bank capital would fall 4.8% under softened capital rules unveiled by U.S. bank regulators on Thursday, freeing up billions in dollars for lending, dividends and share buybacks in a stunning victory for the industry which had faced double-digit hikes under the original 2023 plan.
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