---
title: "The Middle East conflict causes market unease, and the Federal Reserve plans to lower the capital reserve requirements for large banks to 2019 levels"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/279019291.md"
description: "The Federal Reserve plans to lower the capital reserve requirements for large banks to 2019 levels in response to geopolitical shocks and deteriorating financing conditions. Vice Chair Michelle Bowman stated that capital requirements will be slightly reduced, potentially allowing banks to use excess capital for lending or stock buybacks. Although the industry has opposed increasing capital reserve buffers, critics warn against weakening the protective mechanisms established after the financial crisis"
datetime: "2026-03-13T07:24:19.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/279019291.md)
  - [en](https://longbridge.com/en/news/279019291.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/279019291.md)
---

# The Middle East conflict causes market unease, and the Federal Reserve plans to lower the capital reserve requirements for large banks to 2019 levels

As geopolitical shocks and deteriorating financing conditions unsettle the market, the Federal Reserve plans to lower capital reserve requirements for large banks.

On March 13, Reuters reported that the Federal Reserve plans to ease capital reserve requirements for large banks. Federal Reserve Vice Chair Michelle Bowman stated that under the revised draft, capital requirements will decrease slightly, approaching 2019 levels. If capital reserve requirements are too high, it will affect the banking system's fundamental function of providing credit to the real economy.

Morgan Stanley analysts noted that large banks currently have $175 billion in excess capital. The clarity of the new rules may allow these institutions to use these funds for credit or stock buybacks. The industry had strongly opposed a 2023 proposal to increase capital reserve buffers by about 19%.

These stricter regulations were introduced in response to the financial crisis from 2007 to 2009, aimed at making the banking system more resilient. Critics warn against weakening these protective mechanisms now. Democratic Senator Elizabeth Warren stated that the plan creates inadequate rules and overlooks systemic weaknesses. This comes at a time when geopolitical shocks such as the Iran conflict and deteriorating financing conditions are unsettling the market

## Related News & Research

- [ECB seeks bigger say on banks' capital requirements](https://longbridge.com/en/news/282658740.md)
- [China stats bureau deputy head: Middle East conflict will have some impact on China's exports](https://longbridge.com/en/news/282929249.md)
- [Finance ministers warn Middle East conflict to weigh on growth and markets](https://longbridge.com/en/news/282853472.md)
- [NRI term plans surge 35% amid West Asia tensions, demand doubles: Report](https://longbridge.com/en/news/282641547.md)
- [Banxico governors split over impact of Middle East conflict](https://longbridge.com/en/news/282220984.md)