On March 19, the Federal Reserve announced a proposal that would ease capital requirements for large Wall Street financial institutions, potentially freeing up billions of dollars for lending, stock buybacks, and dividend payments. "These changes will strengthen our overall capital architecture, which will remain robust under the new regulatory framework," said Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, in a statement. The proposal will undergo a 90-day public consultation period before being finalized. The proposals were jointly developed by Federal Reserve officials, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.
The Federal Reserve Board of Governors will formally vote on the plan on Thursday. Officials describe the proposal as part of capital unification. If these plans are finalized, along with measures such as easing restrictions on leverage ratios and reforming stress tests, it will constitute the largest overhaul of bank capital regulations since the 2008 global financial crisis. The Fed stated in a memo that these proposals, taken together, are expected to "moderately reduce" capital requirements for large banks. (Jinshi)
