U.S. banking regulators are poised to roll out a package of capital-rule proposals that officials hope will encourage both Wall Street banks and midsize lenders to expand lending.
Officials at the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are set to unveil the proposals as soon as next week, according to people familiar with the matter.
The set of measures includes three separate elements related to how banks calculate and hold capital.
First, regulators plan to present a revised version of the U.S. implementation of Basel III capital rules. Federal Reserve Vice Chair for Supervision Michelle Bowman said last month that a revised proposal would be issued by the end of March.
Second, one of the proposals would permit midsize lenders to adopt standardized methodologies when calculating their capital requirements. Regulators say this measure addresses concerns that smaller institutions could otherwise face the administrative and financial burden of using the more complex capital calculation frameworks employed by the largest Wall Street banks.
Third, the Federal Reserve intends to propose an adjustment to the surcharge applied to U.S. global systemically important banks. Under the plan, that surcharge would be indexed to changes in nominal gross domestic product, a move that officials characterize as bringing the large-bank capital buffer closer to international norms.
The announcements are being presented as a coordinated regulatory effort across the Fed, the FDIC and the OCC. Details on the specific mechanics and timelines beyond the broad outlines above have not been disclosed by officials in the reporting available to date.
The proposals collectively focus on capital calculations and buffers - technical elements that determine how much loss-absorbing capital banks must hold. Regulators describe the package as intended to reduce barriers to lending for smaller institutions while aligning certain large-bank requirements with global standards.
Observers should note that the available information provides the broad contours of the package but leaves open questions about implementation specifics and the final regulatory text.