US banking regulators are expected to vote this morning on their latest attempt to overhaul capital requirements following years of intense lobbying.
Federal Reserve Vice Chair for Supervision Michelle Bowman said last week the new proposals would loosen rules rather than tighten them, earning praise from banking trade associations like the American Bankers Association (though the groups hedged that “the details will matter”).
Because easing requirements will mean that banks can keep less cash on hand to cover potential losses, progressives like Sen. Elizabeth Warren, D-Mass., have warned that doing so risks another financial crisis.
The banks counter it will bolster economic growth by freeing up capital for investment.
With the Basel III regulations requiring the European Union and Britain to implement similar changes, the EU is set to again delay its rules so its financial institutions aren’t at a disadvantage.