I just reviewed the proposals released by the Federal Reserve this week, and honestly, it’s one of the most aggressive moves we’ve seen in years to loosen restrictions on Wall Street. We’re talking about reducing capital requirements by up to 4.8% for the mega-banks. That’s quite significant.

The Fed basically announced plans to adopt Basel III standards, reform how banks assess risk, and modify the capital buffer that was imposed after 2008. The combined impact of these measures would reduce requirements by 2.4% just under the new rules, but when you add previous reforms in stress tests, the total reduction reaches 4.8% for large banks like JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup.

What’s interesting is that mid-sized banks benefit even more, with drops of 5.2%, and smaller banks see reductions of 7.8%. Clearly, the Fed is encouraging credit and wants Wall Street to regain market share from private credit funds.

Jay Powell justified this by saying it’s a “healthy practice” to review standards nearly two decades after the crisis. Michelle Bowman, the regulator appointed by Trump, supported the changes, arguing they would strengthen the capital framework. But here’s where it gets interesting: Michael Barr strongly opposed them, calling the reforms “unnecessary and reckless,” warning they would harm the resilience of the U.S. financial system.

The numbers are juicy. If you include last year’s leverage rule reforms, the total package would free up about $117 billion in capital that banks would no longer need to hold. Considering they currently have $2 trillion in capital requirements, it’s a significant change.

What’s going to happen now is predictable: banks will allocate that freed-up capital to more loans, share buybacks, and sector consolidation. Some analysts already foresee this prompting other markets to request their regulators also loosen rules. The Bank of England and the European Union are watching how Washington implements this before deciding on their own reforms.

This is a clear victory for Wall Street lobbying groups. The proposals are subject to a 90-day consultation period, so there’s still time for comments, but the direction is clear. The banking industry is already celebrating this.