How much bank capital will be unlocked?
The Fed and OCC proposal to limit bank leverage is broadly good for the eight banking giants it affects, including JPMorgan, Goldman Sachs Group Inc. and Citigroup Inc. But how much capital it unshackles depends on a complicated array of factors.

Initially, the Fed estimates that the firms’ bank holding companies would have a negligible $400 million of newly freed capital to pay out to shareholders or to buy back stock. Still, that figure is dwarfed by the $121 billion in excess capital the Fed says its proposal might trigger at the companies’ chief banking subsidiaries.

On the other adjustment -- the Fed’s revision of stress tests and risk-based capital -- the agency estimated that it would cut the total cushion that the industry has to maintain by $30 billion. However, the regulator said capital demands for the biggest banks might actually rise by as much as $50 billion. Goldman Sachs analysts have a rosier outlook, projecting in a report last week that easing stress-test assumptions could free up more than $50 billion in capital.

If billions in capital is redeployed, where will it go?
Bank investors salivating over big dividend hikes might be disappointed. The $121 billion the Fed said could be redeployed by its leverage-ratio proposal comes with a catch. Banks can’t just hand it out to their shareholders because the firms’ holding companies are already under specific limits on how much they can disperse.

What the bank subsidiaries could definitely do with the freed capital is send it to their parent companies. From there, it can be deployed to nonbank units such as broker-dealers or foreign banking arms.

Does this mean post-crisis rules have been ripped to shreds?
On the contrary.

While the changes have been long-anticipated, they keep in place the oversight established after the crisis. The Fed’s stress tests, the hundreds of Dodd-Frank Act regulations implemented by federal agencies and the bulk of capital restrictions hatched at the Basel Committee on Banking Supervision are cemented in place.

Even with Republicans in control of the White House and Congress, the GOP hasn’t made any traction on its most aggressive plans for eviscerating Dodd-Frank. The bipartisan bill that cleared the Senate in March helps smaller lenders but does little for Wall Street. It’s now awaiting a response from the House.

There is more to come from regulators, assuming they live up to promises to ease restrictions such as Volcker Rule constraints on bank trading, Bank Secrecy Act enforcement pressures and some demands of the Community Reinvestment Act.

Will the regulators’ proposals make banks less safe?
Opinions are split.