Wall Street welcomes a major victory! US regulatory agencies relax leverage requirements, easing capital pressure on Bank of America Corp (BAC.US) and other major banks.

U.S. regulators took a significant step on Tuesday, preparing to relax bank capital requirements, which have long been criticized by the industry for limiting the ability of Financial Institutions, Inc. to act as intermediaries in the U.S. Treasury market during times of market stress. This move is seen as a major victory for Wall Street's large banks, and reflects the Trump administration's tendency to relax regulatory policies. Officials from the Federal Deposit Insurance Corporation (FDIC) voted to approve the final proposal, easing the "enhanced supplementary leverage ratio" (eSLR). Under this measure, the capital requirements for the largest U.S. banks, including Bank of America Corp. (BAC.US), JPMorgan Chase (JPM.US), and Goldman Sachs Group, Inc. (GS.US), will decrease relative to their total assets. The final version is expected to be largely consistent with the draft published in June. In April of this year, President Trump announced a new round of tariff measures, causing market volatility and drawing new attention to regulatory standards. Against this backdrop, relaxing the eSLR is seen as a significant victory for the banking industry. Various capital rules established after the global financial crisis in 2008 are now being adjusted by officials in the Trump era to ease the regulatory burden on Wall Street. However, this reform has not yet been fully implemented. The Federal Reserve and the Office of the Comptroller of the Currency (OCC) have not announced a time for voting on the final version. All three regulatory agencies must approve the new rules before they can be formally implemented. Market analysts point out that as the U.S. Treasury market has experienced liquidity strains during times of stress in recent years, relaxing leverage requirements may increase the ability of large banks to absorb and distribute assets in the Treasury market, helping to dampen volatility. However, there are concerns that the new measures may weaken the capital buffer of the banking system, potentially bringing new risks in a deteriorating economic environment.