Wall Street wants to rewrite the rules set after 2008 crisis

Crypto Insight Summary: * Eight major US banks warned that Basel capital rules could raise trading desk capital requirements by 30% to 89%, prompting calls for regulatory easing. * Wall Street’s push is part of a broader rollback of post-2008 financial crisis regulations, with US authorities already reviewing key capital rules. * Analysts estimate the proposed changes could free up about $1 trillion in lending capacity, while regulators in Europe and Asia are also reconsidering their frameworks. **Eight major US banks have reportedly stated that the new Basel capital requirements could increase capital requirements for their trading desks by 30% to 89%. This attempt to weaken the regulations follows the efforts by the US government to change the regulatory regime that was established after the financial crisis of 2008. This shift could reshape lending capacity across the world’s largest economy and ripple into risk appetite for assets including crypto.** The latest lobbying campaign by Wall Street is aimed at the treatment of Treasury market risk within the Basel system. According to the [report](https://www.ft.com/content/42febd49-ee94-4d74-84ae-a2bc23ff4a24?syn-25a6b1a6=1), the reason for this worry is clear. The recent crises in Treasury markets in 2020 and regional banks in 2023 proved this point. This current fight is just another episode in the long history of attempts to undo the regulatory framework developed as a result of the 2008 financial crisis. Morgan Stanley analysts have estimated that the combined changes could hand US banks roughly $1 trillion in additional lending capacity. Crypto Insight Analysis: Direction: Neutral Impact: Minor Impact Horizon: Mid-term (1-8 weeks) Reasoning: Looser regulations may boost liquidity but crypto's correlation with traditional finance is limited.