The banking world in America is experiencing a major shake-up as new rules promise to give financial institutions much more freedom to operate. President Trump signed an executive order in August 2025 called “Guaranteeing Fair Banking for All Americans” that targets unfair banking practices and requires new strategies to protect customers from being denied services for political reasons.
American banks gain unprecedented freedom through Trump’s groundbreaking executive order targeting political discrimination and unfair banking practices nationwide.
This deregulation could unbar an enormous amount of money—about $2.6 trillion in additional lending capacity. Think of it like removing the emergency brake on a car that was already running well. American banks currently hold around $200 billion more than they need under current rules, and this extra cash could soon flow into loans, stock buybacks, and business deals. Banks may use their retained earnings to fund these expansion activities and return value to shareholders through increased dividend distributions.
The changes focus on reducing something called the Supplementary Leverage Ratio from 5% down to around 3.4% to 4.3%. While these numbers might sound boring, they represent real freedom for banks to lend more money to families buying homes, students paying for college, and businesses looking to grow.
However, not everyone around the world is following America’s lead. Europe continues its careful approach, focusing on simplifying rules rather than loosening them considerably. It’s like Europe is choosing to organize their toolbox better while America is buying bigger tools entirely. Financial institutions found engaging in politicized debanking may face remedial actions including fines and consent decrees from federal regulators.
The United Kingdom might join America’s party though, potentially freeing up about $0.5 trillion in banking capacity. Switzerland is going the opposite direction, actually requiring its major bank to hold even more money in reserve—up to 19% compared to much lower requirements elsewhere. Banking regulators must also conduct internal audits of past account closures within 120 days to identify potential discriminatory practices before examinations begin.
These different approaches create interesting challenges for global banks that operate across multiple countries. They must follow strict rules in Switzerland while enjoying more freedom in America, like playing different sports with different rulebooks on the same field.
The ultimate question remains whether this American experiment will prove successful enough to convince other regions to follow suit, or if Europe and Asia will stick to their more cautious strategies while watching from the sidelines.
