U.S. Federal Reserve Moves to Finalize New Capital Rules for Big Banks

On April 17, 2026, U.S. Federal Reserve Vice Chair for Supervision Michelle Bowman communicated to major bank executives that she does not anticipate a significant backlash against the newly proposed capital rules. These rules, which include relaxed drafts of the "Basel III" and "Global Systemically Important Bank (GSIB) surcharge" regulations, are projected to reduce capital levels at large U.S. banks by approximately 4.8%. This marks a notable shift from the Fed's original 2023 plan, which proposed a 20% increase in capital requirements.

Reuters

The new capital rules have elicited mixed reactions within the banking sector. Notably, JPMorgan Chase, the largest U.S. bank, indicated that its capital levels would actually increase by around 4% under the new framework. CEO Jamie Dimon described the proposals as "very flawed" and "un-American." Other bank executives have expressed intentions to provide feedback during the Fed's 90-day comment period, which is expected to conclude in mid-June. Despite previous aggressive lobbying efforts against the 2023 capital plan, which included advertisements and threats of legal action, sources suggest that the industry may adopt a more measured approach this time.

Reuters

Bowman emphasized the Fed's commitment to finalizing the rules swiftly, stating, "I'm sure not all of it is going to be positive, but my hope is we've struck the right balance." She defended the changes by arguing that economic growth would enhance financial stability and that the new rules would be more attuned to actual risks. However, critics warn that the relaxed capital requirements could pose risks to the financial system.

Reuters

Concerns have been raised by various stakeholders regarding the potential hazards of looser capital regulations. Some analysts and executives fear that these changes could be perceived as a "Wall Street giveaway," particularly in light of the upcoming midterm elections, which could shift congressional power to Democrats who may scrutinize the proposals more closely. Additionally, dissenting voices within the Fed, including former Supervision head Michael Barr, have expressed reservations about the new rules.

Reuters

The Federal Reserve aims to finalize the new capital rules within the year, with feedback from the banking sector expected to play a crucial role in shaping the final proposals. As the comment period approaches its end, the Fed's ability to navigate the political landscape and maintain consensus among its board members will be critical in determining the future of these regulations.

Reuters

• “I'm sure not all of it is going to be positive, but my hope is we've struck the right balance, I think it’s a very middle-of- the-road, reasonable proposal,” — Michelle Bowman, Vice Chair for Supervision, U.S. Federal Reserve

Reuters

• “We worked very hard to have as much consensus as possible,” — Michelle Bowman, Vice Chair for Supervision, U.S. Federal Reserve

Reuters