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The trade group for the nation’s largest banks and the nation’s main real estate agent trade group say the Federal Reserve’s revised “Basel III” proposal for large-bank capitalization rates is a step in the right direction.

The American Bankers Association, which represents the large banks most affected by the rule, and the National Association of Realtors both praised the new rules announced by Fed Vice Chair Michael Barr in a speech Tuesday.

The Basel III rules are intended to prevent a repeat of the Great Financial Crisis in 2008 by making sure the biggest national and regional banks in the country sock away significant amounts of cash to cover losses in the event of an economic catastrophe.

The Fed had earlier proposed raising the largest banks’ capital requirements by 19 percent. In his speech Tuesday, Barr said the Fed’s new proposal would raise requirements for megabanks by only 9 percent, and for large regional banks with less than $250 billion in assets, like M&T Bank and Citizens, by between 3 percent and 4 percent once unrealized gains and losses on their securities portfolios are accounted for.

While bank stocks suffered Tuesday, suggesting traders had hoped for a smaller drain on banks’ profits in order to build up these reserves, the ABA said it “welcomed” Barr’s announcement saying the wave of industry criticism in response to the Fed’s first Basel III proposal meant “a do-over was absolutely necessary.”

“We will carefully review this new proposal with our members, recognizing that America’s banks are already well-capitalized and, as Vice Chair Barr acknowledged today, any increase in capital requirements will still carry a cost for the economy and must be appropriately tailored,” ABA President and CEO Rob Nichols said in a statement.

When the Fed’s first proposal was unveiled earlier this year, industry groups from outside the banking sector also raised strong objections. Their big fear: Banks would throttle back lending to large swaths of the economy as they sought to tuck money away to meet the Basel III requirements.

The new rules don’t seem to pose the same kind of risk NAR indicated.

“The Federal Reserve’s revised Basel III proposal is a win for the housing market, Realtors®, and consumers. By making it easier for banks to support low down payment loans, these changes should ensure continued access to affordable home financing. The proposal laid out by the Federal Reserve also recognizes the strength of changes made more than a decade ago to regulation and oversight of the housing finance industry in the wake of the subprime crisis,” NAR 2024-2025 President Kevin Sears said in a statement. “We applaud the Fed for this thoughtful adjustment, which ultimately reflects a commitment to a healthy housing market and reinforces the stability we’ve worked hard to achieve.”