Federal Reserve Vice-Chair Michelle Bowman unveiled new bank capital rules to replace the controversial "Endgame" framework. The proposals, described as Basel-ish, represent a significant departure from post-2017 standards. While maintaining compliance with international norms, the rules introduce substantial changes to operational risk calculations and revenue definitions that will impact how banks quantify their risk exposure.

A major shift involves the potential elimination of the "output floor" provision, which previously required banks to maintain capital requirements at 72.5% of calculations without internal models. The US may also abandon credit risk modeling entirely, even as it adopts European approaches to exclude derivatives transactions with non-financial companies from certain requirements, signaling a softening of regulatory stance.

Smaller US banks receive a five-year phase-in period for accounting requirements, while the removal of stress buffers and add-ons for global systemically important banks further eases regulatory burdens. This regulatory easing places the US in a potential "race to the bottom" with Europe and the UK, where global competitiveness considerations increasingly influence capital requirements designed to ensure financial stability.