The US will propose revisions to the Basel rules this month, reports Bloomberg via Reuters

(Reuters) – The U.S. Federal Reserve and other regulators are set to unveil sweeping changes to a series of proposed capital rules for banks as soon as Sept. 19, Bloomberg News reported on Friday, citing people familiar with the matter.

The revisions could be up to 450 pages long and would include key rule changes that focus on operational risk provisions, including a reduction in the capital banks must set aside for business lines such as wealth management services and certain credit card transactions, the report added.

The revised new proposal would also reduce market risk requirements for the country’s largest lenders, which would not face as stringent requirements on mortgage or equity exposures, the report said .

Next Tuesday, Fed Vice Chairman Michael Barr will review the regulators’ revised proposal and explain next steps at the Hutchins Center for Fiscal and Monetary Policy, Brookings said in a blog post.

Regulators began implementing Basel III rules after the 2007-2009 global financial crisis forced taxpayers to bail out several undercapitalized banks.

In July 2023, the Fed, the Office of the Controller of the Currency, and the Federal Deposit Insurance Corporation published proposed changes to the bank capital rules for comment. The rules are expected to overhaul how larger banks assess risk and how much capital they should hold.

Banks, which fiercely opposed the original “Basel III Endgame” proposal, which would have increased capital requirements for larger banks, have called for a re-proposal.

Regulators have been working for months to revise the plan in a way that could significantly reduce the capital impact for larger firms.

The Fed declined to comment on the report. The FDIC and the Office of the Comptroller of the Currency did not immediately respond to Reuters requests for comment.