Revamping Basel III: New Approaches to Bank Capital Rules

The Federal Reserve's Vice Chair for Supervision, Michelle Bowman, indicates that more industry-friendly Basel III Endgame capital rules may be unveiled by late 2025 or early 2026. Regulators are exploring adjustments in banking regulations to address industry concerns while maintaining effective oversight and accountability.

The Federal Reserve's regulatory lead, Michelle Bowman, announced plans to revise the contentious Basel III Endgame capital rules with a more industry-friendly approach by 2025 or 2026. In partnership with the FDIC and OCC, the proposal aims to reflect global standards on measuring bank risks while considering industry feedback.

Previously, efforts under the Biden administration to increase capital requirements at large banks faced significant industry opposition. Now, regulators appointed by Trump are seeking a measured approach, focusing on 'rightsizing' bank capital requirements that emerged after the 2008 financial crisis, Bowman indicated at a Georgetown University conference.

Bowman, leading the reevaluation, emphasized that this undertaking isn't about weakening regulations but optimizing them for effectiveness and transparency. She asserted that maintaining accountability among banks and supervisors remains a priority, even as regulatory frameworks evolve.

(With inputs from agencies.)