Federal Reserve officials are expected to vote Thursday on reducing capital requirements for the nation's largest banks by 4.8%, according to regulatory sources. The proposal would lower the amount of funds that major financial institutions must hold to cover risky assets.

The changes would affect major banks including JPMorgan Chase, Goldman Sachs, and Morgan Stanley. Capital requirements mandate that banks maintain specific levels of funding to absorb potential losses from their lending and investment activities.

If approved, the reduction would represent some of the most significant changes to banking regulations since the restrictions implemented following the 2008 financial crisis. The post-crisis reforms, known as Basel III, established stricter capital standards designed to prevent bank failures and reduce systemic risk.

The proposed changes would free up capital that banks currently must hold in reserve, potentially allowing them to increase lending or pursue other business activities. Financial institutions have long advocated for reduced capital requirements, arguing that current levels exceed what is necessary for safety and limit their ability to serve customers.

Regulatory officials have not yet publicly detailed the rationale behind the proposed reduction or provided specifics about implementation timelines. The vote comes as banking regulators continue to balance financial stability concerns with industry competitiveness.