The Federal Reserve on Tuesday proposed new rules that could allow some large banks to reduce the amount of capital they must hold as a cushion against a future economic shock.
The proposal may clear the way for some large banks to reduce their capital levels in the future but the largest firms on Wall Street are not likely to get such relief, the Fed said.
The proposal is expected to reduce bank paperwork and also make it easier for regulators to monitor the health of banks, said Randal Quarles who is the top Fed official in charge of regulations.
"Our regulatory measures are most effective when they are as simple and transparent as possible," Quarles, the Fed Vice Chairman for Supervision, said in a statement.
The Fed said the proposed changes are likely to somewhat increase the amount of capital required for the 30 largest banks known as GSIBs or global systemically important banks...