Mission Accomplished

Coming soon, a big bailout near you.


US federal regulators are trying to soften bank requirements, loosening the amount of capital US banks must have, in what would be some of the biggest changes to bank restrictions since the 2008 financial crisis and a huge win for financial institutions.

On Thursday, US Federal Reserve officials are expected to vote to lower capital requirements – the funds they need to cover risky assets – for the biggest banks by 4.8%, which could free up capital for banks such as JPMorgan Chase, Goldman Sachs and Morgan Stanley.

Larger regional banks like PNC would see their requirements drop by 5.2%, while requirements banks with less than $100bn in assets would fall by 7.7%.

Capital requirements were increased after Wall Street’s risky bets triggered 2008 financial crisis. Elizabeth Warren, a Democratic senator and ranking member of the Senate banking committee, who helped create regulations after the 2008 financial crisis, said in a statement that the banking industry has been on “a multi-year lobbying assault to gut modest safeguards on Wall Street risk-taking”.

“Big banks can now declare mission accomplished. Today’s proposal grants their every wish,” Warren said. “It’ll mean bigger payouts for megabank shareholders and executives, less lending to small businesses and families, and a banking system even more prone to devastating crashes and taxpayer bailouts.”