Bank Deregulation Primer - May 2026
How is the US-led global bank deregulation agenda impacting the top 19 global banks?
In October 2025, we published our first edition of the Bank Deregulation Primer focused on capital deregulation proposals for the top 19 global banks and their pro forma impact.1
In the second edition of our Bank Deregulation Primer, we now assess the latest wave of regulatory developments and their implications.
The second primer provides senior banking leaders with a clear view of:
- The latest regulatory proposals announced since October 2025
- Updated impact estimates
- The implications for a global level playing field, including a framework to benchmark deregulation potential versus the US
- Evidence of how banks are already deploying capital, based on recent earnings
Key Insights
- In the United States, deregulation could release approximately 160 basis points of CET1 capital, alongside 113 basis points of leverage relief, unlocking around $2.5 trillion in additional asset capacity and supporting a 6% uplift in return on tangible common equity (ROTCE). Banks have already begun deploying this capacity, with total assets increasing by $1.1 trillion and full earnings distributions observed in Q1 2026.
- In the United Kingdom, regulators are expected to deliver approximately 75 basis points of CET1 relief, equivalent to c.$0.4 trillion in additional capacity. Further reforms to leverage and buffers remain under consideration as part of the Bank of England’s competitiveness agenda.
- In the European Union, capital requirements are increasing under CRR3, with estimated CET1 requirements rising by 109 basis points. As a result, European banks risk falling further behind US peers as deregulation supports growth, profitability, and valuation elsewhere.
- Switzerland is moving in the opposite direction, with proposed “too-big-to-fail” reforms potentially increasing CET1 requirements for its sole G-SIB by up to 350 basis points.
“What we are seeing now is US banks using the deregulatory agenda to their competitive advantage. US banks are already deploying substantial amounts of newly available capital into lending growth, acquisitions, shareholder distributions and technology investment.
The divergence between regulatory regimes is becoming increasingly visible in profitability, market share and valuations. US banks are benefiting from lower capital requirements far more quickly than expected, while Europe remains focused on resilience. That gap is only likely to widen further should the policy priorities on both sides of the Atlantic remain the same.” - Fernando de la Mora, Co-Head of Alvarez & Marsal’s EMEA Financial Services practice
To view an updated deregulatory scorecard with potential forecasts on deregulation and financial impacts for the top 19 global banks, read our report today.
As featured in the Financial Times.
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