A recent report by Alvarez & Marsal predicts that US banks will benefit from a the easing of post-Financial Crisis capital rules, which will potentially unlock $2.6 trillion in lending capacity and reinforce their global dominance, as reported by the Financial Times.
Ongoing regulatory reforms could free nearly $140 billion in capital for Wall Street lenders. Since Donald Trump returned to the White House, US authorities have adopted a more bank-friendly stance, loosening rules that previously required banks to maintain high loss-absorbing capital buffers. Alvarez & Marsal predicts a 14% reduction in common equity tier one requirements, boosting US banks’ earnings per share by 35%. JPMorgan Chase alone could release $39 billion in capital, lifting its earnings per share by 31% and return on equity by 7%.
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