07:40 AM EDT, 06/25/2024 (MT Newswires) -- The Federal Reserve has shared a three-page document with other US regulators proposing changes to their bank-capital overhaul, potentially easing the burden on Wall Street lenders, Bloomberg reported on Tuesday, citing people familiar with the matter.

The revisions might scale back significant parts of the original proposal, particularly affecting banks with large trading operations, according to the report.

The Fed document doesn't include an updated estimate on how much additional capital large banks would have to hold as a cushion against financial shocks, Bloomberg reported, but added that early calculations suggest the proposed changes could lead to an increase as low as 5% down from the original 16% hike.

Fed Vice Chair for Supervision Michael Barr has met with the heads of the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to discuss lowering the capital hike, according to the report.

While OCC and FDIC officials are open to modifying market risk aspects, they resist excessively low capital increases, Bloomberg said.

Regulators are considering changes to how the proposal assesses risks in trading, wealth management, and investment banking, known collectively as market risk, the report said, adding that they are evaluating the use of internal models by banks to calculate these risks.

The Fed document also suggests changes in the treatment of operational risk affecting many banks. The proposal targets banks with $100 billion or more in assets, including JPMorgan Chase ( JPM ) , Morgan Stanley ( MS ) , Bank of America ( BAC ) , Goldman Sachs ( GS ) , and Citigroup ( C ) .

The FDIC and the Office of the Comptroller of the Currency did not immediately respond to MT Newswires' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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