U.S. Regulators Plan to Ease Capital Requirements for Large Banks, Potentially Freeing Up Billions of Dollars

Odaily News: The Federal Reserve's proposal announced on Thursday would ease capital requirements for major Wall Street financial institutions, potentially freeing up tens of billions of dollars for lending, stock buybacks, and dividend payments. Vice Chair for Supervision Michael Bowman stated in a declaration, "These changes will strengthen our overall capital framework, which will remain robust under the new regulatory structure." The proposal is subject to a 90-day public comment period before finalization. These proposals were jointly developed by officials from the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. The Federal Reserve Board is scheduled to formally vote on the plan on Thursday. Officials described the plan as part of a capital unification effort. If these plans are finalized, combined with measures such as easing the enhanced supplementary leverage ratio rules and reforming stress tests, they would constitute the most significant overhaul of bank capital regulations since those implemented after the 2008 global financial crisis. The Federal Reserve stated in a memo that, taken together, these proposals are expected to result in a "modest reduction" in capital requirements for large banks. (Jin10)