Wall Street Banks Poised for Capital Windfall as Regulations Ease
U.S. banks stand to gain significantly from a proposed relaxation of capital requirements, with estimates suggesting up to $2.6 trillion in additional lending capacity. Alvarez & Marsal's research indicates this policy shift—aligned with the TRUMP administration's deregulatory stance—could unleash $140 billion in capital across Wall Street.
JPMorgan Chase emerges as the primary beneficiary, with $39 billion in potential freed capital projected to boost EPS by 31% and ROE by 7%. The revised framework may reduce Core capital needs by 14% industry-wide, potentially elevating bank earnings per share by 35% and return on equity by 6%.
The regulatory rollback marks a departure from post-2008 crisis constraints, enabling greater flexibility for share buybacks, dividends, and large-scale project financing. Other systemic banks anticipate similar advantages as stress test methodologies undergo revision.
