Working‑capital: capital and rules

Bank capital rules are moving in opposite directions this month: U.S. regulators have floated a lighter draft for the biggest banks, while Kenya is tightening how digital lenders raise borrowing limits. (federalreserve.gov) (techpoint.africa) In the U.S., the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency reopened the Basel III “endgame” debate on March 19, 2026 with a new proposal for large banks. The Fed said the draft would “reduce burden” and let covered banks use one risk-based capital calculation instead of two. (federalreserve.gov) Annaly Capital Management, a mortgage real estate investment trust that trades mortgage bonds and financing spreads, told investors on its April 21 earnings call that the Fed’s reproposed standards were “more market friendly” than both the 2023 draft and current standards. Annaly said that could leave banks with excess capital to deploy into markets such as mortgage-backed securities. (annaly.com) (fool.com) That matters because bank capital is the cash-and-shock-absorber layer that determines how much lending and trading a bank can support. A lower capital hit on a given asset can make that asset cheaper to hold and easier to finance. (federalreserve.gov) (arnoldporter.com) Big banks are also reporting that they have room to absorb stricter rules if they come later. Capital One said its common equity Tier 1 ratio was 14.4% on March 31, 2026, and Yahoo Finance’s summary of the company’s April 21 earnings call said liquidity also increased in the quarter. (investor.capitalone.com) (finance.yahoo.com) Reuters reported on April 17 that Federal Reserve Vice Chair for Supervision Michelle Bowman had told large banks not to mount another aggressive campaign for additional relief. That points to a narrower fight than the one that followed the tougher 2023 proposal. (msn.com) Kenya’s draft goes the other way in consumer credit. The Central Bank of Kenya and the Sacco Societies Regulatory Authority want banks and digital lenders to stop raising loan limits automatically after a few successful repayments. (techpoint.africa) (msn.com) Under the Kenyan proposal, lenders would have to check income, expenses, existing debts and assets before offering a higher limit. Techpoint reported the draft is aimed at a market where mobile apps have long used repayment behavior as the main signal for more credit. (techpoint.africa) The two moves target different risks with the same tool: capital and underwriting rules. In Washington, regulators are recalibrating how much loss-absorbing capital the largest banks should hold; in Nairobi, regulators are trying to slow the automatic expansion of household debt. (federalreserve.gov) (techpoint.africa) What happens next is procedural, not immediate. The U.S. bank-capital reproposal is in the comment stage, and Kenya’s consumer-protection draft would still need to be finalized before lenders must change how they set loan limits. (federalreserve.gov) (msn.com)