U.S. to Ease Bank Capital
U.S. regulators proposed loosening Basel-derived capital rules that would cut required capital by roughly 5% for big Wall Street banks and up to about 7.8% for smaller institutions — a move pitched to free up lending, buybacks and dividends ( ). The proposal was flagged across regulator commentary and social coverage on March 19, and critics warn the change could raise systemic risk if buffers shrink too far ( ).
The Federal Reserve, the FDIC and the OCC issued three notices of proposed rulemaking on March 19, 2026 to “modernize” U.S. bank capital rules and set a public comment deadline of June 18, 2026. (federalreserve.gov) One proposal would consolidate risk-based calculations for Category I and II firms into an “expanded risk‑based approach,” another would recalibrate standardized risk weights (including mortgage-related exposures), and a third—led by the Fed—would revise the U.S. G‑SIB surcharge. (federalreserve.gov) The agencies’ own estimates show these package changes would lower aggregate common equity tier 1 requirements by roughly 4.8% for the biggest banks, about 5.2% for midsize firms and up to roughly 7.8% for smaller banks. (news.bloomberglaw.com) Fed Governor Michael Barr formally opposed the package, saying when combined with recent eSLR changes the result would be a roughly 6.0% reduction in tier‑1 requirements — about $60 billion less loss‑absorbing capital for the largest banks. (federalreserve.gov) Vice Chair for Supervision Michelle Bowman framed the overhaul as a bottom‑up correction of “duplicative” and mis‑calibrated measures and said capital would remain robust, while bank trade groups including the ABA and SIFMA called the proposals a data‑driven step forward. (federalreserve.gov) Watchdogs warned of risks: Better Markets said the re‑calibration, particularly for trading and broker‑dealer exposures, could enable firms to lower capital via the market‑risk framework, and several industry and community bank groups signaled they will press the agencies during the comment period. (bettermarkets.org)
