Will the Basel III Endgame final rule, when published, increase aggregate G-SIB capital requirements by less than 5%?
Why This Question Matters
Basel III Endgame is the single largest unpriced regulatory binary facing the cohort, with market-implied probability of approximately 42% favorable. A favorable rule (aggregate increase <5%) would re-rate capital-markets-bank capital cost downward and prolong MATURE_OPTIMIZATION. An unfavorable rule (>=5% increase) would force capital retention, partially repudiate the build-not-buy strategy, and accelerate contraction risk. Highest-impact regulatory market in the cohort.
Resolution Criteria
Resolves YES if the Basel III Endgame final rule is published by the Federal Reserve, OCC, and FDIC by December 31, 2026, with an aggregate capital requirement increase for Category I banks (the cohort) of less than 5% relative to current Standardized Approach risk-weighted assets, as estimated by the Federal Reserve's accompanying impact analysis. Resolves NO if the published increase is 5% or greater, or if no final rule is published by December 31, 2026. Source: Federal Reserve / OCC / FDIC joint final rule publication and impact analysis.
Resolution Source
Federal Reserve / OCC / FDIC joint Basel III Endgame final rule publication and Federal Reserve impact analysis
Source Trigger
Basel III Endgame final rule (1H 2026) — 42% market-implied probability favorable; single largest unpriced regulatory binary; favorable rule prolongs MATURE_OPTIMIZATION and re-rates capital-markets-bank capital cost downward; unfavorable rule accelerates contraction risk.
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