Regulators in several major markets are moving to ease bank rules that were tightened after the 2008 financial crisis, with the U.S. taking the most aggressive direction. In the U.S., bank regulators are pursuing changes that could lower how much capital large lenders must hold, including adjustments to leverage rules, the GSIB surcharge applied to the biggest global banks, and revisions to Basel III Endgame requirements. At the same time, the Federal Reserve is revamping its annual stress tests in a way that is expected to reduce required capital set-asides. Analysts estimate the combined effect could translate into roughly $1 trillion of additional lending capacity for U.S. banks—capital that can also be redirected toward buybacks, dividends, or acquisitions depending on strategy and market conditions.
On paper, minimum common equity tier 1 (CET1) requirements across the U.S., euro zone, and UK look broadly similar—U.S. requirements for Wall Street banks sit in a range around 10.9%–11.8% after add-ons, euro zone banks average about 11.2%, and the Bank of England’s system-wide estimate is roughly equivalent to around 11%. But comparing headline ratios can mislead because jurisdictions use different approaches to risk-weighting assets, and those technical differences can tighten or loosen constraints in practice. Europe and the UK are moving more cautiously: both have delayed parts of the trading-rule package while watching U.S. decisions, and officials have framed simplification as an effort to streamline supervision rather than cut overall capital.
