US Regulators to Release Updated Basel III Proposal by March 2026

Federal Reserve Vice Chair for Supervision Michelle Bowman confirmed that US regulators expect to release an updated "Basel III Endgame" proposal by the end of March 2026. The announcement follows a consensus reached between the Federal Reserve, the OCC, and the FDIC regarding the reproposal of the banking regulation framework. A key focus of the new draft is the recalibration of capital requirements for residential mortgage lending, aimed at encouraging banks to re-enter the mortgage business. These reforms represent the final stages of post-2008 financial crisis standards while attempting to address industry concerns over excessive capital burdens. The finalized rules will significantly impact major financial institutions including JPM and BAC, as well as sector-specific ETFs like XLF and KRE. Market participants view the potential easing of requirements compared to initial drafts as a potentially bullish signal for the banking sector and mortgage-backed securities.