A U.S. bank regulator has approved new rules aimed at easing leverage requirements for banks, allowing firms to allocate less capital as a cushion against losses on low-risk assets. The Federal Deposit Insurance Corporation (FDIC) approved the final rules for the “enhanced supplementary leverage ratio,” and other bank regulators are expected to follow suit with similar approvals, after the rules were initially proposed in June.
According to an FDIC staff memo, the new rules are estimated to reduce overall capital for large global banks by approximately $13 billion, or less than 2%. However, depository institution subsidiaries at those banks could see capital requirements decrease by an average of 27%, or $213 billion. Officials clarified that the relaxed rule would not permit banks to increase payouts to shareholders, as overarching holding companies remain subject to other capital constraints.
Banks are required to comply with the new standard by April 1, but have the option to voluntarily adopt the rule starting at the beginning of 2026. This relaxation marks one of the initial steps by banking regulators to ease stricter rules and policies that were implemented following the global financial crisis. The Trump administration aims to reduce regulations to stimulate economic growth, and regulatory officials have argued that the current requirements have proven excessively burdensome and can impede bank activities such as lending.
The FDIC also approved a proposed rule that would lower leverage requirements for smaller banks. Specifically, the proposal seeks to reduce the community bank leverage ratio, which applies to banks with less than $10 billion in assets, from 9% to 8%.
