Regulatory Overhaul: Trump’s Triumph or Looming Risk?

In a major shift, President Donald Trump's regulators are set to overhaul bank capital requirements, a move hailed by major lenders as a victory. This initiative could see a reduction in the capital needed by large banks, reversing a hefty hike proposed under former President Joe Biden's administration.

The changes, which include trimming "Basel Endgame" capital hikes and revising annual economic stress tests, could allow big banks like JPMorgan and Bank of America to maintain or lower their capital levels. Executives believe this reform marks a turning point for an industry previously facing increased capital burdens.

Despite optimism within the banking sector, critics warn the deregulation might endanger financial stability, especially as economic uncertainties loom. However, regulators, poised to introduce a new Basel draft by 2026, argue that modernizing the rules could boost economic growth by freeing up banking capital.