This year, adjustments in US financial regulation have brought significant changes to the banking industry. Regulatory authorities have allowed large banks to increase leverage, improved stress testing mechanisms, and relaxed guidelines on high-risk loans. As a result, the six largest US banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley—saw their total market capitalization surge from $1.77 trillion at the end of last year to $2.37 trillion. This represents a growth of $600 billion in just one year.

Even more interesting is that these banks now hold a large amount of idle capital. Previously, they had preemptively increased their capital buffers according to old rules, and now this money can be used to absorb risks, expand business, or for share buybacks and dividends.

Of course, there are concerns that the scale of deregulation might be too large. However, based on investor reactions, it seems that not many are worried about the rising risk appetite of banks. The market generally believes that, given the limited growth in bank asset sizes, they still have enough room to take on more risk. However, some analysts point out that this risk might be hidden and could only become apparent over time.