Regulators in the United States have recently rolled back rules that were implemented following the 2008 financial crisis, which had limited the extent of risk banks could undertake in corporate lending. This change affects the leveraged lending guidance established in 2013 by the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve. The original guidance aimed to curb banks' capacity to issue riskier loans, a move that was part of broader efforts to stabilize the financial system and protect consumers from the repercussions of excessive risk-taking in the banking sector. The relaxation of these rules may contribute to an increase in high-risk lending practices, potentially impacting the stability of the financial system and raising concerns about the implications for economic equity and consumer protection.
