Capital Requirements Under New Basel Proposal Expected to Be More Favorable to Banks

The Trump administration plans to ease regulations on banks by rethinking the Basel III endgame capital requirements. This could include eliminating the current dual-stack capital calculation requirement, the recalibration of the GSIB surcharge as well as operational risk capital charges, and changing annual federal stress tests to be more transparent, among others. Federal Reserve Chair for Supervision Michelle Bowman stated she wants these rules to “work together” and noted that overall capital charges may not decline. Some experts caution that the changes could make banks more vulnerable to future economic shocks. A new Basel III draft is expected by early 2026. 

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