US Banks Push for More Basel Relief Amid Treasury Liquidity Fears

JPMorgan Chase (JPM) and other major US banks are seeking further modifications to Basel regulatory rules, warning that current market-risk rules could curb Treasury liquidity and raise trading capital requirements.

Details of the Demands

The demands relate to the 'Basel III endgame' rules aimed at strengthening bank capital requirements. The banks focus on market-risk rules, which they say impose significant burdens on Treasury trading, potentially reducing liquidity in this critical market.

Banks' Position

The banks view the current rules as overly conservative, leading to unnecessary costs. They are calling for relaxation to ensure continued Treasury liquidity, which is vital for the financial system.

Regulators' Stance

Regulators have not yet issued an official response. However, discussions between the banking sector and regulators are expected to continue.

Potential Impact

If the rules are relaxed, it could reduce banks' capital requirements, boosting their profits. However, it might increase systemic risks. Investors are closely watching developments.