US bank regulator approves relaxed leverage rules

Core Viewpoint - The U.S. bank regulator has approved new final rules to ease leverage requirements for banks, allowing them to set aside less capital against low-risk assets [1][4]. Group 1: Regulatory Changes - The Federal Deposit Insurance Corporation (FDIC) has approved the new rules for the "enhanced supplementary leverage ratio," with other regulators expected to follow suit [1]. - The new rules are estimated to reduce overall capital for large global banks by $13 billion, or less than 2%, while depository institution subsidiaries will see an average capital requirement reduction of 27%, equating to $213 billion [2]. Group 2: Implementation Timeline - Banks must comply with the new standard by April 1, but they can voluntarily adopt the rule as early as the beginning of 2026 [3]. Group 3: Context and Implications - The relaxed requirements are part of a broader initiative by the Trump administration to ease regulations established after the global financial crisis, aiming to promote economic growth [4]. - Critics argue that easing these safeguards increases risks for financial institutions and is not justified [4]. - The final rule requires banks to set aside capital based on their role in the global financial system, addressing concerns that the previous leverage requirements were too binding due to rising government debt [5]. Group 4: Additional Proposals - The FDIC has also approved a proposed rule to lower leverage requirements for smaller banks, reducing the community bank leverage ratio from 9% to 8% for banks with less than $10 billion in assets [6].