Three major US banking regulators have unveiled a set of far-reaching proposals to modernize the capital requirements governing financial institutions of all sizes. The Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, and the Office of the Comptroller of the Currency (OCC) jointly published a trio of draft rules and invited feedback from the public until June 18, 2026.
Largest Institutions Face Streamlined, Risk-Sensitive Regime
Under the first proposal, the largest and most internationally active US banks would be required to comply with a single calculation method for risk-based capital, replacing the use of two different approaches. This is aimed at simplifying compliance and improving the precision of risk-based assessments.
The new rules would more closely calibrate capital requirements to reflect credit, market, and operational risks. Banks engaged in significant trading operations would fall under revised market risk rules, while others would have the option to opt in. The intention is to reduce unnecessary burden for smaller market players while making the overall capital framework more responsive to actual risk.
The FDIC is a US government agency that insures deposits and supervises financial institutions. The Federal Reserve Board serves as the nation’s central bank and oversees monetary policy and financial stability, while the OCC regulates and supervises national banks and federal savings associations.
Smaller Lenders To See Calibrated Adjustments
The second proposal is designed with smaller and mid-sized banks in mind, targeting institutions not classified as among the very largest. It revises how capital is assigned for everyday lending activities, aiming to better reflect the actual risk of these operations.
Changes would also address capital requirements linked to mortgage servicing, and adjust standards for those adhering to the community bank leverage ratio. A further requirement would see certain larger banks account for unrealized gains and losses from securities holdings in their regulatory capital calculations. This update, phased in over time, is intended to offer a truer picture of financial condition and reduce disincentives connected with mortgage loans.
The agencies indicated in their joint statement that these combined changes would result in a gentle decrease in required capital for large institutions, and a more moderate reduction for smaller banks that focus on traditional lending. They emphasized that all capital levels would still remain markedly stronger than before the global financial crisis of 2008.
Systemic Risk Buffer Rules On The Table
A separate proposal, drafted solely by the Federal Reserve Board, focuses on how the largest banks are assessed for systemic risk. If adopted, it would alter the formula used to determine the amount of additional capital the most complex banking organizations must hold. The revision seeks to ensure that buffers are sized appropriately for risks posed to the broader financial system.
Collectively, the agencies described the overall effort as modernization of the regulatory capital framework, reflecting lessons learned over the previous decade. They are actively encouraging industry participants and the wider public to offer input during the comment period.
The joint statement from the FDIC, Federal Reserve, and OCC outlined the goal to “modernize the regulatory capital framework for banks of all sizes,” highlighting ongoing efforts to align requirements with contemporary market realities while upholding financial system resiliency.
