Feds to unveil lightened bank-capital requirements in coming days, report says

By Steve Gelsi

U.S. Federal Reserve readying 450 pages of revisions about a year after pushback from initial proposal

The U.S. Federal Reserve is planning to release for public comment a lightened version of its proposed capital requirements in the coming days after its first version faced pushback from banks and politicians, according to a report from Bloomberg.

The 450 pages of revisions to the original 1,100-page proposal include regulations that would pare back the amount of capital banks must hold on their balance sheets for their fee-based, non-interest-bearing businesses, such as credit-card operations and wealth-management practices, the report said.

Regulators are also proposed to remove an "internal loss multiplier" that would have based adjustments in capital requirement on a number of historical operational risk losses, the report said.

The changes could be unveiled as soon as Sept. 19, the report said.

Meanwhile, Michael Barr, vice chair for supervision at the Federal Reserve, is scheduled to speak on bank regulations on Tuesday.

Banking regulators have signaled that they were overhauling the capital requirements after bankers and politicians said they would be stricter than other countries. Banks had said that higher capital requirements would threaten to eat into the amount of money available to lend out to stimulate the economy.

The capital requirements mark the last round of changes under the Basel III regime of banking regulations put in place after the Global Financial Crisis.

Any new changes would be subject to a public-review process prior to final revisions by regulators. The process is not expected to wrap up until after the presidential election.

Also read: Fed may ease stress capital buffers for Goldman, Citi and other big banks: analysts

Also read: Fed cop Michael Barr defends higher capital requirements as bankers bristle

-Steve Gelsi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-09-24 0742ET

Copyright (c) 2024 Dow Jones & Company, Inc.