Agencies Request Comment on Proposal to Modify Certain Regulatory Capital Standards — 2025-06-27

The federal bank regulatory agencies today requested comment on a proposal to modify certain regulatory capital standards to reduce disincentives for banking organizations to engage in lower-risk activities and promote the smooth functioning of U.S. Treasury markets. Banking organizations are subject to both risk-based and leverage capital requirements. Risk-based capital requirements vary based on the risks of individual exposures, imposing lower capital requirements, for example, on a Treasury security with lower risk than on a corporate bond with higher risk. Leverage capital requirements, by design, treat all exposures equally. A leverage capital requirement that is generally higher than risk-based capital requirements can discourage banking organizations from engaging in low-risk activities, such as U.S. Treasury market intermediation.