Wall Street is preparing for a massive surge in lending after the Trump administration’s latest regulatory rollback cleared the way for U.S. banks to unleash an estimated $2.6 trillion in new credit.
A report by Alvarez & Marsal shows that the easing of post-2008 capital rules will free roughly $140 billion in locked reserves, empowering banks to expand into high-growth sectors like AI, data centers, and energy infrastructure.
From Crisis Rules to Credit Expansion
Since returning to office, President Donald Trump has revived an aggressive deregulation agenda, reversing many of the safeguards created after the financial crisis. The overhaul lowers core capital ratios by 14%, boosting potential earnings for major lenders by more than a third and enabling larger shareholder payouts.
“This is an extraordinary amount of financial firepower being released into the economy,” said Fernando de la Mora of Alvarez & Marsal. “It will reshape global competition and reignite American lending.”
JPMorgan Chase is expected to gain the most, freeing around $39 billion in capital, lifting earnings per share by 31%, and increasing return on equity by 7%.
A Global Chain Reaction
The U.S. move has put pressure on regulators worldwide. The U.K. plans to trim requirements to maintain competitiveness, while Switzerland and the EU are taking the opposite route. Switzerland’s stricter rules could force UBS to raise $26 billion following its Credit Suisse rescue, potentially weakening European banks against their American rivals.
At home, Federal Reserve vice-chair Michelle Bowman has championed the rollback, arguing that overly tight standards “drove borrowers out of traditional banking” and into private credit markets.
The Investment Supercycle
With trillions in potential liquidity unlocked, analysts say U.S. banks are now in position to power a new investment cycle centered on AI, reshoring, and clean energy. Huw van Steenis of Oliver Wyman noted that “America is entering a financing boom, and deregulation gives banks the flexibility to fund it.”
Not everyone is convinced. Christine Lagarde of the ECB and Andrew Bailey of the Bank of England have warned against abandoning safeguards that prevent systemic risk. But markets appear unfazed.
With Wall Street already surging and credit expansion on the horizon, Trump’s deregulation wave may mark the beginning of a new era — one defined by risk-taking, rapid lending growth, and the return of U.S. financial dominance.
