Fed eyes capital-rule changes
Federal Reserve officials signaled imminent changes to U.S. capital adequacy rules, aiming to streamline requirements while keeping banks robust — Fed Governor Bowman outlined the plans as near-term policy work reported. The update means quantitative risk teams should expect evolving stress-test inputs and reporting formats in the months ahead.
Bowman listed the four targeted pillars—supervisory stress testing, the supplementary leverage ratio, the Basel III risk‑based framework and the G‑SIB surcharge—during her March 12, 2026 Cato Institute speech federalreserve.gov. The Federal Reserve Board is scheduled to vote next week on whether to publish the draft package for public comment, and industry notices say the public comment window will typically run about 90 days if approved bankingjournal.aba.com. One specific calibration Bowman has flagged would stop deducting mortgage servicing rights from regulatory capital while keeping a 250% risk weight on those assets, a change she described at an American Bankers Association event as intended to support on‑bank mortgage origination bankingjournal.aba.com. Separate proposals from 2025 would reduce stress‑buffer volatility by averaging firms’ maximum CET1 declines across the prior two supervisory stress tests (Federal Register NPR published April 22, 2025) and increase public disclosure by releasing detailed model documentation and proposed 2026 scenarios (transparency NPR, Oct. 24, 2025) — moves that create precise inputs banks can use to re‑run capital projections. federalregister.gov Market reporting and Fed commentary characterize the cumulative capital impact as modest for the largest banks and slightly larger for midsize and smaller firms, with regulators framing the package as a recalibration rather than a large‑scale rollback. bloomberg.com
