Big banks may see significant rollbacks on capital rules, potentially benefiting lenders and market

From Yahoo Finance: 2025-06-23 15:05:00

US regulators are expected to consider a significant rollback of bank capital rules this week, potentially giving lenders relief. The proposal would lower the eSLR ratio for major US banks like JPMorgan by 1.5 percentage points, aiming to increase lending and boost demand for US Treasurys amid foreign debt concerns. Treasury Secretary Scott Bessent supports this deregulatory move.

The change could benefit big banks like JPMorgan, according to TD analyst Jaret Seiberg. Fed’s Michelle Bowman hinted at further capital rule adjustments, including for global systemically important banks. Jamie Dimon and other bank bosses have pushed for regulatory review. A conference on US bank capital framework is set for July 22.

The Fed will no longer factor reputation risk into bank exams under new leadership. Bowman emphasized the importance of flexible regulations to ensure banking system safety and financial stability. DC lobbyists have criticized leverage capital rules for hindering banks during crises, like the onset of the pandemic when banks struggled with Treasury market demand. Bowman suggests reforms to bolster market resilience and reduce Fed intervention risks. Fed Chair Jerome Powell has also advocated for reducing the supplementary leverage ratio to improve Treasury market liquidity.



Read more at Yahoo Finance: Big banks are close to getting one of biggest regulatory rollbacks since 2008