US bank regulators have suggested a big change to capital rules that would require banks to set aside 16% more money.

This could make asset risk go up, which could lower returns on equity and earnings.

The Securities Industry and Financial Markets Association, the Financial Services Forum, and the Bank Policy Institute have all warned that this could make it hard for people to get loans and hurt the economy.

Even though three of the biggest banks failed in the spring of 2023, the FSF called the plan “a solution without a problem.”

The plan hasn’t been talked about much by the big banks. JPMorgan Chase CEO Jamie Dimon called it “hugely disappointing,” and Wells Fargo didn’t say anything.

The new risk-weight factors could send more business to lenders who aren’t banks or regulated by the government.

Basel III “Endgame” was passed by the Basel Committee on Banking Supervision in 2017, and banks may need four years to set aside profits to meet the new capital rules.