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The Federal Reserve has cut proposed capital requirements for large US banks by more than half after a backlash from the industry and politicians.
Michael Barr, the US central bank’s top regulator, announced a revised plan on Tuesday that imposes a 9 per cent increase in capital requirements on the biggest lenders, down from the 19 per cent proposed last summer.
The revised rules are a win for banks, which had waged a lobbying blitz against the proposal.
They are a blow for Barr, who had hoped to use the package of banking reforms dubbed “Basel Endgame” to address what he viewed as remaining vulnerabilities in the US financial system.
An initial package of reforms called Basel III was implemented in the wake of the 2008 financial crisis.
Barr characterised the latest changes as a “reproposal”.
This is a developing story
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