Fed Floats Plan With Smaller Capital Hikes for Big Banks

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00:00Bloomberg reporting that the Fed has shown regulators the outline of a revised plan that

00:05would dramatically relax a Biden-era banking capital proposal for Wall Street's largest

00:09lenders. Joining us now is Michael Moore, managing editor for Bloomberg News. Michael,

00:15in what they discussed and what the team over at Bloomberg has seen,

00:18what could those capital requirements look like? Yeah, so when the Biden-era regulators first

00:24rolled out this proposal a couple of years ago, the biggest banks were looking at a 19 percent

00:29jump in their capital requirements, which they were quite livid about and pushed back forcefully

00:35on. This revised proposal, the early calculations are looking at a 3 to 7 percent increase in the

00:43capital that they'd have to hold. So much reduced. And, you know, there was a compromised version that

00:50was floated last year with a 9 percent increase, so even below that. So the devil's always in the

00:56details. These proposals can run thousands of pages, and this is just a broad outline of what

01:02they want to do, but certainly it's in the directions that banks want. How big of a gulf is that between

01:073 and 7 percent? What would those numbers mean, and how would their fortunes change on either end for

01:13the big banks? Yeah, and that's an aggregate number. You know, individual banks could be looking based on

01:18their business mix and looking at different figures. We said some of the ones with larger trading

01:24portfolios. It could be even lower than that 3 percent figure. So I think it will depend on which bank

01:30and a lot of the details that will come through. You know, the proposal is not expected until the

01:36first half of next year. So I think you are going to see a lot of questions, but certainly banks will be

01:44encouraged by this direction.