Softer Fed Touch to Unlock $70 Billion of Big Bank Capital (1)

When the Federal Reserve’s long-awaited proposed changes to a key capital rule landed last week, the reaction from bankers was muted. This is a nice step, they indicated, but wouldn’t mean much without other reforms.

The banks only had to wait two days for that next shoe to drop.

Results from a relaxed version of the central bank’s annual stress test Friday, when combined with planned changes to the supplementary leverage ratio on June 25, are set to potentially unlock as much as $70 billion of capital from the six biggest US lenders.

That would boost the capital banks have ...