financetom
Economy
financetom
/
Economy
/
US bank regulators to unveil long-awaited capital rule rewrite
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
US bank regulators to unveil long-awaited capital rule rewrite
Mar 19, 2026 3:29 AM

WASHINGTON, March 19 (Reuters) - U.S. President Donald Trump's bank regulators are set to formally unveil softened new draft capital rules on Thursday, in a potential victory for Wall Street banks that could unleash billions of dollars for lending, share buybacks and dividends.

The "Basel" and related capital proposals are expected to modestly reduce the amount of money big banks must set aside for potential losses, Federal Reserve regulatory chief Michelle Bowman said last week, a stunning turnaround for an industry that had faced double-digit hikes under the original 2023 draft. 

The Fed, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency are set to approve the Basel draft Thursday morning and begin soliciting feedback, kicking off another potentially frenetic round of industry lobbying as banks gain clarity over how they will fare versus their peers. 

The overhaul follows a years-long Wall Street bank campaign to ease rules introduced after the 2008 financial crisis which they say are stifling the economy. Bowman said the changes would better calibrate requirements in line with risks, although critics say they will weaken financial system safeguards just as geopolitical and private credit risks are surging.

"The initial proposals were pretty punitive and to their credit the regulators have taken their time to try to get it right. Who knows if it will be perfect but certainly they are listening," KBW analyst Chris McGratty said.

Regulators have tried for years to implement the "Basel Endgame," the final piece of international capital standards introduced following the crisis, which focuses on how banks assess and allocate funds to credit, market and operational risks. 

Bowman's Democratic predecessor Michael Barr tried to advance a plan that would have hiked capital for some banks by as much as 20%, but lenders launched an unprecedented campaign to weaken the rule, winning over many lawmakers and sowing division among the regulators. That dragged the project into the Trump administration, which has sided with the industry. 

The Fed ⁠also plans on Thursday to propose tweaks to the "GSIB surcharge" levied on the eight riskiest global U.S. banks by updating some economic inputs and adjusting how short-term funding risk is calculated. Combined, the changes should result in big bank capital falling slightly or coming out flat.

Analysts at Morgan Stanley this month estimated that large banks currently hold around $175 billion in excess capital, and clarity on the rules could allow them to start freeing up that money for lending and share buybacks.

McGratty said the eased capital rules would be much less onerous on banks than the previous plan, "but the devil will be in the details."

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Trump inherits a labor market at full employment. Can he keep it there?
Trump inherits a labor market at full employment. Can he keep it there?
Feb 7, 2025
WASHINGTON (Reuters) - Defying fears of a pandemic-driven Great Depression and bucking Federal Reserve interest rate hikes as well, the U.S. job market has hit what U.S. central bank officials are characterizing as a moment of stable full employment, with balanced wage and job growth and a low unemployment rate. With consumers spending and businesses confident, the baseline outlook is...
Crypto Daybook Americas: Bitcoin Steady Before Jobs Data, Shrugs Off Eric Trump Endorsement
Crypto Daybook Americas: Bitcoin Steady Before Jobs Data, Shrugs Off Eric Trump Endorsement
Feb 7, 2025
By Omkar Godbole (All times ET unless indicated otherwise) The crypto market remains directionless, with bitcoin (BTC) languishing below $100,000 before the U.S. jobs report. It's surprising prices have not yet crossed that threshold, especially after President Donald Trump's son, Eric, encouraged the family-linked WLFI to invest in BTC in a post on X on Thursday. Typically, such endorsements during...
Republican tax, spending package to be unveiled this weekend, US House speaker says
Republican tax, spending package to be unveiled this weekend, US House speaker says
Feb 7, 2025
WASHINGTON, Feb 7 (Reuters) - Congressional Republicans' tax and spending package will be announced this weekend, U.S. House Speaker Mike Johnson said on Friday. Probably not today, Johnson said of an announcement. We got a few more things work on today and tomorrow, but we're planning for a mark up on probably Tuesday. ...
Factbox-Brokerages stick to slower pace of Fed rate cut forecasts ahead of payrolls data
Factbox-Brokerages stick to slower pace of Fed rate cut forecasts ahead of payrolls data
Feb 7, 2025
(Reuters) -Most brokerages continue to expect a slower pace of interest rate cuts from the U.S. Federal Reserve in 2025 ahead of a non-farm payrolls (NFP) report due today amid uncertainty from President Donald Trump's tariff policy. President Trump's tariff policy is expected to drive up inflation and will increase pressure on the U.S. central bank as it looks to...
Copyright 2023-2026 - www.financetom.com All Rights Reserved