Good morning. The U.S. took a step toward easing some of the requirements placed on banks in the wake of the 2008-09 financial crisis, issuing a proposal that would let the largest lenders free up some of the capital they hold for times of market turmoil.

Banks have long lobbied for lowering what’s known as the supplementary leverage ratio, and Treasury Secretary Bessent has said the change would help buttress global markets by allowing banks to buy more Treasurys.

• The vote: The Federal Reserve’s board voted 5-2 on Wednesday to issue a proposal to lower the enhanced supplementary leverage ratio. The enhanced ratio dictates how much capital big banks like JPMorgan Chase and Citigroup must hold against their total assets. The supplementary leverage ratio was originally meant to act as a backstop to rules that require banks to hold capital based on the riskiness of different assets.
   
• What does it mean? The proposal would reduce the amount of core capital that big banks hold at the holding company level by an estimated $13 billion, and at the subsidiary level by an estimated $210 billion, according to Fed officials. That would give banks more flexibility about how they allocate capital across their subsidiaries.
   
• The background: The move is part of a broader set of rollbacks the Trump administration is expected to undertake, including changes to how banks are rated, how they are examined by regulators for financial stability, and the annual stress tests the largest lenders must take. The changes to bank capital rules in particular would strip away some of the “gold plating” U.S. banking rules—or the additional safeguards the U.S. placed on banks above what was required by international agreements.

The big loser from the ‘Genius Act’ is $156 billion crypto giant Tether.

Congress is set to bring stablecoins into the financial mainstream, with legislation that has sparked a frenzy of interest from startups, banks and even retailers like Walmart that were previously wary of cryptocurrencies.

But the bill, known as the Genius Act, has a tough message for Tether, the No. 1 player in stablecoins: Shape up or get kicked out of the U.S. market.

U.S. acts against Mexican institutions allegedly involved in laundering drug money.

The U.S. has banned U.S. financial institutions from moving money to three Mexico-based financial institutions, the first action under a law meant to give the Treasury Department more power to target money laundering associated with fentanyl.

The Treasury Department’s Financial Crimes Enforcement Network said Wednesday it blocked banks and other institutions under its jurisdiction from moving money to and from commercial banks CIBanco and Intercam as well as brokerage firm Vector.

• Cryptocurrency ATM operator Coinme agreed to pay $300,000 to settle allegations from California’s top financial regulator that it violated the state’s digital assets law.
   
• The White House said Iranian oil remains under U.S. sanctions after President Trump in a social-media post said China was free to buy it.
   
• The U.S. executive branch would be prohibited from acquiring or using artificial intelligence developed by companies in China, including DeepSeek, under federal legislation proposed Wednesday.
   
• Global financial oversight remains dangerously fragmented in the face of growing threats from proliferation financing and sanctions evasion, the Financial Action Task Force warned in a report.
   
• The European Union said it would launch an in-depth investigation into Mars’s bid to take over Pringles seller Kellanova, escalating its probe into the nearly $30 billion deal amid concerns it could stifle competition.
   
• The Financial Accounting Standards Board plans to establish requirements on how companies account for government grants in their financial reports, following awards provided in recent years as pandemic-related and other relief.
   
• French fintech company Worldline lost more than $500 million in market value after several media outlets reported that the group covered up fraud by some customers to shield its own revenue.
   
• The nation’s largest corporate law firms have been on their heels during President Trump’s second term, but for small firms with impeccable conservative bona fides these have been boom times.
   
• Vietnam’s parliament on Wednesday voted to remove the death penalty for several offenses, including embezzlement, sparing the life of a tycoon whose $12 billion fraud conviction riveted the nation.
   
• A mediator has proposed that President Trump and Paramount Global settle his lawsuit over a CBS News “60 Minutes” interview with former Vice President Kamala Harris for $20 million, according to people familiar with the matter.

A weakened Iran poses an alliance test for China, Russia and North Korea.

As Iran reels from its gravest threat in decades, its alliance with China, Russia and North Korea—an axis that has increasingly alarmed the U.S. and allies—is facing a vital test: Will its partners come to its aid?

Beijing, Moscow and Pyongyang could offer Iran crucial assistance to recover from the damage inflicted by U.S. and Israeli strikes on its nuclear program and arsenal of conventional weapons. That could deepen the alliance, sending a powerful signal for potential conflicts in Taiwan, the Korean Peninsula and Eastern Europe.

• Iran Nuclear Program Suffered ‘Enormous Damage,’ Says U.N. Atomic Agency Chief

• The U.S. is making a fresh push in negotiations to end the fighting and free the hostages in Gaza, as President Trump hopes to build on the momentum of a deal that paused hostilities between Israel and Iran and bring an end to the conflict that sparked nearly two years of war in the Middle East.
   
• Higher energy prices as a result of conflict in the Middle East might weaken eurozone economic growth and thus have a damping effect on inflation, the European Central Bank’s vice president said Thursday.
   
• President Trump said his Russian counterpart Vladimir Putin was the “more difficult” leader to convince of ending the war in Ukraine, during a press conference Wednesday in which he also voiced support for NATO, an organization he has long attacked.
   
• Demand for stablecoins has risen significantly but the crypto assets shouldn’t be the mainstay of the future monetary system, a group representing the world’s top central banks said.
   
• German consumer sentiment edged lower for the first time in four months as households opted to boost savings, despite greater optimism surrounding their income prospects.

• President Trump’s former lawyer Emil Bove defended his actions as a top Justice Department official, including in the corruption case against New York City’s mayor, as he parried Democrats’ accusations that his temperament and ethics disqualified him from serving on a federal appeals court.
   
• Shell is holding early-stage talks to acquire rival BP in what would be the largest oil deal in a generation, people familiar with the matter said.
   
• Conagra Brands will remove certified food, drug and cosmetic colors from its U.S. frozen product portfolio by the end of 2025.

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