American banking watchdogs are rolling back restrictions on leveraged lending that date back over a decade. The move comes as private credit markets explode in size, while traditional banks push back against what they see as regulatory overreach squeezing them out of the game. This shift could reshape how capital flows through the financial system, potentially opening new avenues for institutional liquidity that might eventually spill into alternative assets. Banks argued the old framework put them at a disadvantage compared to less-regulated shadow lenders. Now, with constraints loosening, expect the competition for yield to heat up.