A movement led by JPMorgan CEO to review tougher rules in US B.C

JP Morgan Chase CEO Jamie Dimon and other big CEOs have adopted a tactic since last year that has made it harder for the Federal Reserve (Fed) to hold more capital for borrowers. Now, the strategy seems to be paying off.

The Fed and two other federal regulators are moving toward a new plan that would significantly reduce the nearly 20% mandatory capital increase for the largest U.S. banks, according to people familiar with the matter.

The capital increase required by banks such as JPMorgan and Goldman Sachs – aimed at ensuring they have enough buffers to absorb potential losses – will be, on average, half of what was originally forecast, according to the sources.

Top officials from the three agencies involved in the pending capital rules — the Fed, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) — are still negotiating technical and substantive revisions, and nothing is guaranteed. An agreement will be reached. Also, the project could be ready by the end of this year.

If approved, the plan would be a big win for banks and Dimon. Banks say the originally proposed rules would cut profits and restrict lending. It also reflects a shift in the balance of power between the big banks and their regulators.

At a meeting in Washington last fall, Dimon told his fellow CEOs to ignore Michael Barr, the Federal Reserve’s vice chairman of oversight and chief architect of the original plan. Dimon urged his fellow bankers to pressure other Fed officials, particularly Chairman Jerome Powell, to change the proposed capital rules.

The CEOs of major US banks met with Powell more than a dozen times between July and March of last year, according to the central banker’s public calendar. This included four meetings or phone calls with Dimon.

On Friday, the Fed released Barr’s calendars, showing he met with the CEOs of the biggest US banks 15 times during the same period. He met with Dimon in April and May, and “I have not lost sight of the banking lobby,” Barr said in a statement.