US set to cut capital requirements for banks \ stacker news ~econ

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US set to cut capital requirements for banks www.ft.com/content/90196d6d-b147-4943-9b26-888c171d6a5a

417 sats \ 9 comments \ @Coinsreporter 13h econ

US authorities are preparing to announce one of the biggest cuts in banks’ capital requirements for more than a decade, marking the latest sign of the deregulation agenda of the Trump administration.

Bank lobbyists have been campaigning against the rule for years, saying it punishes lenders for holding even low-risk assets such as US Treasuries, hinders their ability to facilitate trading in the $29tn government debt market and weakens their ability to extend credit.

What! "punishes lenders" which means punishes banks. Basically they are asking for their "No ACCOUNTABILITY" back.

In 2008-09 crisis, we saw many US banks fall because they weren't already bound to the higher capital requirements. At least that's the reason I thought when no indian Bank fell. Indian Banks are required to maintain a minimum of $116 capital + equal amounts deposited in the bank with the Reserve Bank of India.

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21 sats \ 3 replies \ @Undisciplined 13h

I’m getting lots of late stage bubble vibes lately

28 sats \ 2 replies \ @Coinsreporter OP 13h

I believe that economic policy for the institution who hold the Public Money should be the strictest to avoid any crisis. But I see US doesn't like to be stricter and this becomes the case for crisis almost everytime.

27 sats \ 1 reply \ @Undisciplined 13h

I think the bigger problem is the expectation of being bailed out. The moral hazard in US banking is insane.

38 sats \ 0 replies \ @Coinsreporter OP 12h

Yep. There are provisions for banks ba out here as well but the provisions are so strict, there is little chance of a bank falling..

31 sats \ 2 replies \ @justin_shocknet 13h

Bessent has been talking about "re-leveraging" the banking system, as rules since the GFC have led to the monetary stimulus we've seen since which is a far worse evil. Powell too has said the SLR needs re-calibration.

It does stand to reason that Treasuries are treated as cash since they're both pulled from the states ass, that's how supply can grow without price inflation like with the aforementioned monetary stimulus.

You can be sure that if Bessent is for it, and the FT is trying to FUD it, it's good news.

0 sats \ 1 reply \ @Coinsreporter OP 12h

Does it have anything to do with the printing of more money?

0 sats \ 0 replies \ @justin_shocknet 12h

Depends how print is defined, this would mean less printing in the form of monetary stimulus and national debt, but does allow the banks themselves to create more private credit elastically with growth (non-inflationary).

Both are good for Bitcoin, as even in a non-inflationary scenario Bitcoin is a savings vehicle... higher growth = more excess savings available for Bitcoin.

The difference is if Bitcoin goes to a million you might actually be able to buy what is today a million dollar house with it instead of that house increasing 10x over the same period.

0 sats \ 0 replies \ @denlillaapan 9h

Little bit of a nothingburger.

From the FT piece:

Most big US banks are more constrained by other rules such as the Fed’s stress tests and risk-adjusted capital requirements, which may limit how much they benefit from SLR reform.

0 sats \ 0 replies \ @Dkryptoenth 12h

Nice