US regulators unveiled plans to reduce capital requirements for the largest banks by 4.8%, marking a major shift in post-2008 financial safeguards. The Federal Reserve proposed adopting Basel III rules, adjusting risk assessments, and revising capital buffers for institutions with over $700bn in assets, including JPMorgan Chase and Goldman Sachs. The move, criticized by some Fed officials as weakening crisis protections, would lower capital mandates by 7.8% for smaller banks under $100bn and 5.2% for mid-sized lenders.

The reforms aim to boost lending and share buybacks but face internal dissent. Fed Governor Michael Barr opposed the changes, calling them "unnecessary and unwise," warning they could harm financial stability. Supporters argue the adjustments reflect two decades of regulatory evolution and align with global standards despite U.S. market differences. The proposal includes a 90-day public consultation period, with potential finalization by year-end.

Analysts suggest the changes could trigger similar easing efforts globally, as the Bank of England and EU regulators delay Basel reforms. Critics emphasize the $117bn reduction in total capital requirements might embolden bank mergers and riskier behavior. The Fed defended the plan, stating it maintains a "robust" framework while adapting to modern financial practices.

The decision highlights tensions between deregulatory advocates and stability-focused policymakers. With Wall Street lobbying victories accumulating, the U.S. financial system faces renewed scrutiny over balancing growth and risk management. Capital requirements cut remains the central theme amid ongoing regulatory debates.