US Banks See Win as Trump Regulators Move to Ease Capital Rules

America’s biggest banks are preparing for a regulatory victory as Trump-appointed financial watchdogs move to overhaul capital requirements, raising expectations that Wall Street will face lighter rules than under the Biden administration’s proposals.

The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) are working on a revised “Basel Endgame” capital framework, due early 2026. Industry insiders say the updated version will likely scale back several contentious measures, including the “dual stack” approach that forced banks to comply with whichever of two risk models was stricter.

The Biden-era draft rules, unveiled in 2023, would have raised capital requirements by an estimated 19%, adding more than $200 billion in additional cushions across the system. But under the Trump administration’s deregulatory stance, officials are signaling a “capital-neutral” outcome — keeping total system-wide requirements stable while easing burdens on the largest institutions.

Banks are pushing for reductions in surcharges on Global Systemically Important Banks (GSIBs) and greater transparency in stress testing, arguing that capital locked up in buffers limits lending, investment, and shareholder returns. Analysts suggest easing could free up billions for stock buybacks and dividends.

Critics, however, warn that cutting requirements may undermine financial stability. Democratic policymakers and watchdog groups argue that weakening safeguards leaves the system exposed to shocks, recalling lessons from the 2008 financial crisis.

The Trump regulators’ final framework is expected to be unveiled by early 2026, setting the stage for a major battle over the balance between financial stability and industry flexibility.