Fed Capital Rules Overhaul for GSIBs
Key Questions
What changes did the Fed announce regarding capital rules for GSIBs?
On March 12, the Fed overhauled S&C rules, with Basel III live on March 19 and effective April 12, 2026. This cuts CET1 requirements by ~4.8% for GSIBs.
What is the capital relief impact for Bank of America?
Bank of America gains ~$88 billion in relief from ERBA, CVA, and AOCI adjustments, part of ~$50 billion for GSIBs and $219 billion for majors. CET1 remains robust at 11.2%.
How does the capital relief affect buybacks, dividends, and lending?
It fuels $40 billion in buybacks ($4.5 billion quarterly) and a dividend hike to 28¢ (2.3% yield). This boosts lending, M&A, and ties to Q1 returns, reducing volatility.
Fed 3/12 S&C 3/19 Basel III rules live 4/12/26 cuts CET1 4.8% BOA/GSIBs ($88B/$50B relief ERBA/CVA/AOCI; $219B majors); robust CET1 fuels $40B buybacks ($4.5B/qtr) div hike 28¢ (2.3% yield); volatility drop; confirmed GSIB. Boosts lending/M&A/buybacks; ties to Q1 returns/CET1 11.2%.