The Federal Reserve is proposing sweeping new banking regulations

The Federal Reserve has disclosure changes to a proposed set of regulations for US banks that would cut about half the extra capital some of the biggest institutions will be required to hold.

The original regulations, introduced in June 2023 and called Basel Endgame, would increase capital requirements for major banks by 19%.

His new proposal, which is now known as the Basel III endgame, was introduced by Fed officials, the Office of the Controller of the Currency and the Federal Deposit Insurance Corp. – would increase capital levels by 9% for large banks, according to comments made by Fed Vice Chairman for Supervision Michael Barr.

The new proposal comes after many politicians and banking industry experts rejected the original proposal – warning it could harm the economy and restrict lending.

The new version comes after Fed Chairman Jerome Powell said the central bank was looking to make “broad significant changes” to the plan and was aiming for a majority consensus from the Federal Reserve Board.

Large regional banks with between $100 billion and $250 billion in assets would be largely exempt from capital requirements. Barr said the change would likely increase capital requirements by 3 percent to 4 percent incrementally. This decision follows last year’s bank failures, which were caused by filings related to unrealized loan losses.

“This process has led us to conclude that extensive and material changes to the proposals are warranted,” Barr said in a statement. “There are benefits and costs to raising capital requirements. The changes we plan to make will bring these two important goals into better balance.”