This Week's Capital Proposals

Yesterday, regulators released proposals seeking to modernize the capital requirements for financial institutions.

Collectively, these proposals represent an effort to appropriately calibrate financial regulations to support stability while expanding lending capacity. We are studying them carefully and will have more to say in the coming weeks.

Our first impressions

The Ledger Project believes that well-calibrated capital requirements can support both the resilience of our banking system and the flow of affordable, accessible credit to households and businesses. 

Yesterday's proposals reflect a thorough and responsive step toward modernizing the U.S. capital framework. Financial institutions of all sizes would see greater ability to lend and deploy capital supporting families, small businesses, and communities across the country, with a focus on supporting small banks and their customers.

Here's what they're saying:

• Treasury Secretary Scott Bessent: "Today is an important step in the regulatory reset our Administration is working towards, marking meaningful progress toward a financial system that builds Parallel Prosperity for Main Street and Wall Street."
• Reuters: "The changes [regulators] are proposing to the 'Basel III' and 'GSIB surcharge' rules, along with ‌tweaks to banks' annual 'stress test' health checks, will calibrate capital in line with real risks, while still keeping the financial system safe, they say."
• Small Business & Entrepreneurship Council: "This approach is especially important for America’s entrepreneurs and small business owners, who rely on sound regulation to ensure healthy capital markets and access to credit to grow their firms."
  
• Federal Reserve Vice Chair for Supervision Michelle Bowman: "This is just the first step of our ability to look into how we've set our asset thresholds so that we're tailoring our regulations and our supervision to ensure that we're capturing the risks that are unique to the different size, business model, and risk of each institution, and appropriately ensuring that they're safe and sound and in compliance with the rules and regulations."

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