Mike, what are we learning. Well, this is the latest iteration of a long effort to try to align US bank regulations with the rest of the world. It's generally sort of known as the Basel three proposals.In essence, they simplify the rules. The calculations for capital retention account for risks differently and have different standards, in some cases for smaller banks, for the biggest banks on Wall Street. Category one and Category two.They've been required to use two risk models in the past to calculate the ...

Core Viewpoint - Federal Reserve Governor Stephen Miran emphasizes the need for reworking Wall Street regulations before addressing other economic issues related to the central bank's balance sheet [1] Group 1: Regulatory Focus - Miran advocates for a reassessment of existing Wall Street regulations, indicating that this should be a priority for the Federal Reserve [1] - The call for regulatory changes suggests a potential shift in the Federal Reserve's approach to financial oversight [1] Group 2: Economic Implications - The discussion on regulations precedes any deliberation on broader economic questions, highlighting the importance of regulatory frameworks in shaping economic policy [1] - Miran's comments reflect a strategic focus on ensuring that regulatory measures are in place before tackling the complexities of the central bank's balance sheet [1]

Saudi Arabian banks are starting to show signs of pulling back on lending for the first time in years as liquidity tightness and new bank regulations make it more challenging to keep up with demand for credit https://t.co/3ZK4cJci8n ...

Core Viewpoint - The U.S. banking industry anticipates a reduction in capital requirements due to regulatory changes under President Trump's administration, reversing the previous increase proposed under President Biden [1][3]. Group 1: Regulatory Changes - The Trump administration is working on a significant overhaul of U.S. capital rules, the most extensive since the 2008 financial crisis, aimed at reducing red tape that is perceived to hinder economic growth [2]. - Proposed changes include narrowing the "Basel Endgame" capital hikes, reducing capital surcharges on risky global banks, and revising annual stress tests for banks [2][3]. Group 2: Industry Response - Major banks are optimistic that the anticipated regulatory changes will keep their capital levels stable or even lead to a decrease, contrasting sharply with the 19% capital hike faced in 2023 under the draft Basel capital rules [3]. - The banking sector has long argued that existing capital rules are excessive and miscalibrated, suggesting that excess capital could be better utilized for lending [4]. Group 3: Economic Implications - With large banks like JPMorgan Chase, Bank of America, and Citigroup holding approximately $1 trillion in capital, even a minor reduction in capital requirements could release billions for lending, trading, dividends, and share buybacks [5]. - Critics warn that weakening capital regulations could expose the banking industry to risks, especially as the economic outlook becomes uncertain [5]. Group 4: Future Outlook - The new regulatory chief of the Fed, Michelle Bowman, indicated that while she aims for cohesive rules, she does not necessarily expect capital levels to decline, with a new Basel draft expected by early 2026 [7].