Mid-sized banks are concerned about potential US regulators tightening capital and liquidity requirements for banks with $100 billion or more.

The Fed’s tightening since March 2022 has flooded banks’ longer-term securities, causing investor concern over bank balance sheets.

Banks have reduced securities investments or sold them at a loss to increase liquidity.

Bank of America and JPMorgan have sold securities for a year, with JPMorgan reporting $420 billion in cash and $990 billion in high-quality liquidity assets and unencumbered securities.