Fed's First Step in Banking Reforms: Reviewing Distorted Capital Requirements

The Federal Reserve is taking significant strides towards reforming bank leverage rules, with its top regulatory official emphasizing the process as a 'first step' in a comprehensive review of 'distorted' bank capital requirements.

Vice Chair for Supervision Michelle Bowman revealed on Monday that an upcoming Wednesday meeting aims to revisit these rules. This forms part of an extensive series of reforms intended to modify existing capital mandates for banks.

The planned changes may also encompass adjustments to the surcharge imposed on major global banks, as well as exploring what capital requirements should apply to larger regional banks. This initiative underscores the Federal Reserve's commitment to easing regulatory burdens while ensuring financial stability.

(With inputs from agencies.)