Core Viewpoint - The Federal Reserve is restarting the process of establishing new risk capital rules, which will reduce the burden on large U.S. banks compared to the proposals from the Biden administration [1] Group 1: Regulatory Changes - The new proposal, led by Vice Chairman for Supervision Michael Barr, aims to simplify the calculation of bank capital [1] - The regulatory body is expected to abandon the original 1,087-page proposal of the Basel III final rule published in 2023, with the goal of introducing new regulations by the first quarter of 2026 [1] - The initial proposal under Barr would have increased capital requirements for large U.S. banks by 19%, which was later revised down to 9% [1] Group 2: Industry Consultation - Prior to the initiation of this work, bankers and lobbyists gathered in Washington for a comprehensive assessment meeting hosted by the Federal Reserve to provide industry feedback before the new regulations are drafted [1] - Barr has criticized the original Basel III final rule proposal, suggesting it posed a risk of "over-calibration" and was even stricter than the Basel standards set by the Bank for International Settlements [1] Group 3: Collaboration with Other Agencies - The Federal Reserve will collaborate with other major U.S. banking regulators, including the FDIC and the OCC, to develop the new rules [1] - The expected capital increase from the new proposal is anticipated to be lower than the revised 9% level [1]