Bloomberg reports US plans to propose revisions to Basel rules this month

The Federal Reserve of the US, along with other regulators, plans to make broad changes to a batch of proposed banks' capital rules as early as Sept. 19, according to a report from Bloomberg News on Friday, which cited people who have knowledge of the matter.

The amendments, it said, ran to some 450 pages in length and introduced fundamental rule changes that focus on the operational risk accord, including a reduction in the capital levels banks must hold against business lines such as wealth-management services and some credit-card operations.

The revised proposal would also relax the market-risk requirement for the country's largest lenders, which would also not be subject to the same stringent requirements pertaining to mortgages or tax-equity exposures, the report said.

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Fed Vice Chair Michael Barr will preview the regulators' revised proposal and outline the next steps at the Hutchins Center on Fiscal & Monetary Policy, Brookings said in a blog post.

The Basel III rules began to get rolled out after the 2007-2009 global financial crisis forced taxpayers to bail out several undercapitalised banks.

In July 2023, the Fed, the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation published for comment proposed changes to bank capital rules. The rules are set to revolutionise how larger banks measure risk and the amount of capital they keep.

Banks, fierce opponents to the initial "Basel III Endgame" proposal, which would increase the capital requirements on the larger banks, have been asking regulators for a proposal.

Regulators have been working for months in an attempt to revise the plan in a manner that could significantly reduce the capital impact for larger firms.

The Fed declined to comment on the report. The FDIC and the Office of the Comptroller of the Currency did not immediately respond to Reuters' requests for comment.