Bank capital is essential for banks because not only is it used to fund financial activities, like making loans, but it also protects banks against failure by absorbing losses. Banks need that protection because their activities – which can be complex and high-risk, especially at the largest banks – can result in big losses. And when a bank has losses that are more than its capital, it goes bankrupt and can’t pay back its depositors unless the government steps in.  This is exactly what happened with the largest Wall Street banks when loans and high-risk investments caused huge losses in 2008, resulting in bank failures, costly bailouts, and the worst global financial and economic crisis since the Great Depression.

Let’s be clear about what is happening now with capital at the largest U.S. banks: those banks and their army of lobbyists – and allies in the Trump administration and at the banking regulatory agencies – are working overtime to get capital as low as it was before the horrific 2008 Crash. Low levels of capital are great for large bank executives because lower capital means higher bonuses, but it’s bad for the American people because low capital also means more bank failures, which hurt the economy and lead to taxpayer bailouts. That’s the choice: either banks have enough of their own capital to prevent their bankruptcy in the first place or Americans are forced to inject capital into the banks after the fact to prevent them from failing and devastating the country.

The attack against bank capital is going to continue until the industry gets exactly what it wants. Our leaders need to push back against this attack and fight for strong capital requirements for the largest banks. Better Markets has worked extensively on strong capital requirements for the largest banks, and links to many of our pieces are below.

• Press release and Fact Sheet showing that the agencies are fulfilling the industry’s goal of bringing capital levels to 2007 levels (10/1/2025)
• Background Report and Fact Sheet on why strong bank capital requirements are necessary (12/22/2022)
• Report on community banks illustrating the upside-down capital framework that favors the largest banks and disadvantages community banks (9/24/2025)
• Fact Sheet for the 12/2/2025 House Committee on Financial Services hearing with prudential regulators which summarizes the industry-friendly actions of the agencies under the current administration
• Press releases on the Fed’s proposal (6/25/2025) and the FDIC’s proposal (6/27/2025) to cut large bank capital requirements via the enhanced supplementary leverage ratio
• Press release and comment letter opposing the proposal to cut large bank capital requirements via the enhanced supplementary leverage ratio (8/26/2025)
• Press release on the finalization of the cutting of large bank capital requirements via the enhanced supplementary leverage ratio (11/25/2025)
• Press release on Fed’s 11-year 100% stress test pass rate for banks (6/27/2025)
• Press release on the Fed’s announcement of proposals to further weaken the stress tests (10/24/2025)
• Press release and comment letter on the Fed’s publication of stress test scenarios, which helps banks to game the stress test (12/2/2025)
• Press release on the Fed’s proposal to weaken supervision, which will increase risks and losses (8/14/2025)

For even more materials on bank capital, click here.