Wall Street banks are pressing US regulators to loosen proposed Basel global bank capital standards, warning the draft could weaken liquidity in the $29 trillion US Treasury market and urging a rethink, the Financial Times reports. The Treasury market’s potential instability has become the focal point of industry lobbying. Under pressure, the Fed and other regulators have already substantially watered down the original proposal; the rules are now expected not to materially raise aggregate US ban

Wall Street banks are pressing US regulators to loosen proposed Basel global bank capital standards, warning the draft could weaken liquidity in the $29 trillion US Treasury market and urging a rethink, the Financial Times reports. The Treasury market’s potential instability has become the focal point of industry lobbying. Under pressure, the Fed and other regulators have already substantially watered down the original proposal; the rules are now expected not to materially raise aggregate US bank capital and could even lower it. A letter from eight large US banks estimates the latest proposal would raise capital requirements for Treasury-related bank activity by 30% to 89%.