US regulators are preparing to announce one of the largest reductions in bank capital requirements since the post-2008 financial crisis reforms. The move, supported by the Trump administration, specifically targets the Supplementary Leverage Ratio (SLR), a rule introduced in 2014 that requires large banks to hold a set amount of high-quality capital against their total leverage, including off-balance-sheet exposures. Banking industry groups have long criticized the SLR, arguing that it penalizes banks for holding low-risk assets such as US Treasury securities and limits their ability to support market liquidity and extend credit. The proposed changes could either lower the SLR to align with international standards or exclude certain low-risk assets from the calculation, as was done temporarily during the pandemic. Analysts estimate that reintroducing this exemption could free up about US$2 trillion in balance sheet capacity for large US banks, with State Street identified as the most affected by the SLR. Senior US officials, including Treasury Secretary Scott Bessent and Federal Reserve Chair Jay Powell, have expressed support for revising the SLR. The Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) are expected to present reform proposals in the coming months. The administration has also effectively halted further advancement of the Basel framework, signaling resistance to international regulation of US banks. Critics warn that loosening capital requirements amid ongoing market volatility and global economic uncertainty could increase risks to the financial system. Some analysts note that relaxing the SLR may encourage banks to increase their holdings of government debt, potentially reducing government borrowing costs. In parallel, President Donald Trump issued an executive order on May 9 titled "Fighting Overcriminalization in Federal Regulations." The order highlights that the Code of Federal Regulations contains over 48,000 sections and over 175,000 pages. It directs federal agencies to publicly disclose all criminal regulatory offenses they enforce in an annual report to the Office of Management and Budget and to require evidence of intent for most regulatory prosecutions. The order aims to protect individuals from prosecution for unknowingly violating complex or obscure regulations and to limit the scope of regulatory enforcement.