US EditionUS Regulators Unveil Plans to Ease Capital Rules for Big Banks
The draft would reduce capital requirements by nearly 5% for the largest banks, freeing billions for lending and dividends, marking the biggest regulatory shift since 2008.
- On Thursday, the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency approved a softened Basel draft, cutting large bank capital requirements by 4.8%.
- This reversal follows a years-long Wall Street campaign to ease rules introduced after the 2008 financial crisis, contrasting sharply with Michael Barr's 2024 plan that sought capital hikes up to 20%.
- Analysts at Morgan Stanley estimate large banks hold around $175 billion in excess capital, while banks below $100 billion in assets will see requirements drop by 7.8%.
- Fed governor Michael Barr plans to dissent, calling the changes "unnecessary and unwise," while critics warn the softened rules could weaken financial safeguards amid rising geopolitical and private-credit risks.
- Regulators will now solicit public feedback, with Fed Vice Chair for Supervision Michelle Bowman maintaining that bank capital will remain "robust" as the Fed proposes tweaks to the "GSIB surcharge.
32 Articles
32 Articles
Proposals announced by the Fed plan to lower capital requirements, put in place after the 2008 financial crisis. One of the objectives, dear to the White House, is to lower the pressure on credit.
Fed Moves to Ease Capital Rules for Banks
U.S. regulators have released plans to relax capital requirements for the country’s largest banks, a move that could unlock billions in lending. Wall Street’s biggest lenders could face lighter capital requirements under proposals released by the Federal Reserve and other U.S. regulators on March 19, a rollback of post-2008 banking rules. The plan, backed by the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Co…
The proposal, which will still be passed on by public consultation, is one of the most aggressive to relax the restrictions imposed on the Wall Street institutions after the financial crisis in 2008
Good morning, European banks have long been complaining that capital requirements for American competitors are much more lenient, allowing them much more…
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