Agencies Issue Final Rule to Modify Certain Regulatory Capital Standards — 2025-11-25

The federal bank regulatory agencies today jointly issued a final rule that modifies certain regulatory capital standards to reduce disincentives a banking organization may have to engage in lower-risk activities, such as intermediating in U.S. Treasury markets. The final rule is substantially similar to the proposal issued in June, with changes at the depository institution level. Like the proposal, the final rule modifies certain leverage capital standards applicable to the largest and most systemically important banking organizations to serve as a backstop to risk-based capital requirements and to avoid discouraging these organizations from engaging in low-risk activities. The rule sets the standard for these bank holding companies and their depository institution subsidiaries based on each organization’s overall systemic risk. For depository institution subsidiaries, the final rule differs from the proposal by capping the enhanced supplementary leverage ratio standard at one percent, making the overall requirement for these institutions no more than four percent.