* Category IV banks are those with between $100 billion to $250 billion in total assets. These banks are subject to supervisory stress testing every other year, versus every year, and are not required to run internal stress tests at all. They also do not need to maintain a countercyclical buffer, nor are they subject to enhanced or supplementary leverage capital requirements. They also have no liquidity coverage ratio requirements or net stable funding ratio requirements. Finally, liquidity stress tests take place quarterly instead of monthly, and can employ tailored liquidity risk management. 

* Beyond these four categories, the Federal Reserve lists "other firms," which are banks with $50 billion to $100 billion in total assets. They are subject only to standard risk-based capital and leverage capital rules. 

Taken together, the Federal Reserve estimates that the changes would result in a 0.6 percent decrease in required capital and a reduction of 2.5 percent of liquid assets for all U.S. banking firms with assets of $100 billion or more. The proposal said that the measures build on the agencies’ existing practice of tailoring capital and liquidity requirements based on the size, complexity and overall risk profile of banking organizations. 

"The proposals would prescribe materially less stringent requirements on firms with less risk, while maintaining the most stringent requirements for firms that pose the greatest risks to the financial system and our economy," Federal Reserve Chairman Jerome H. Powell said.

Comments will be accepted through Jan. 22, 2019.