The U.S. Federal Reserve and other regulators are set to unveil sweeping changes to a set of proposed capital rules for banks as early as Sept. 19, Bloomberg News reported Friday, citing people familiar with the matter.
The revisions could run as long as 450 pages and would include key rule changes focusing on operational risk provisions, including a reduction in the capital banks must allocate to business lines such as wealth management services and certain credit card operations, the report added.
The revised proposal would also lower the market risk requirement for the country’s largest lenders, which would not face as stringent requirements around mortgages or tax and equity exposures, the report said.
On Tuesday, Federal Reserve Vice Chairman Michael Barr will preview the regulators’ revised proposal and outline next steps at the Hutchins Center on Fiscal and Monetary Policy, Brookings said in a blog post.
Regulators began implementing Basel III rules after the 2007-2009 global financial crisis forced taxpayers to bail out several undercapitalized banks.
In July 2023, the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation published proposed changes to bank capital rules for comment. The rules are expected to overhaul how larger banks measure risk and how much capital they must hold.
Banks, which fiercely opposed the original “Basel III Final” proposal, which would increase capital requirements for larger banks, have been calling for a new proposal.
Regulators have been working for months to revise the plan in a way that could significantly reduce the impact on capital for larger companies.
The Federal Reserve declined to comment on the report. The FDIC and the Office of the Comptroller of the Currency did not immediately respond to Reuters’ requests for comment.
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