A plan to loosen capital requirements for the largest banks would lower equity buffers and free capital for lending, dividends and buybacks; JPMorgan’s strong Q1 profit leaves it well positioned to benefit. The Fed's recent stress test found big banks could absorb over $708 billion in losses and, unusually, the results will not change capital requirements this year, which may smooth the path for the proposed loosening. At the same time, regulators and critics warn that reduced buffers could amplify losses if geopolitical or credit risks materialize.
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