Recently, there has been big news in the regulatory circle - the banking regulatory agency over in the United States has finally eased its stance.

Here's the thing: banks have been complaining that the current capital regulations are too rigid, and they are being tightly restricted from buying more government bonds. Now, the good news is that the Federal Reserve and several major regulatory agencies have sent a modification proposal to the White House for approval. According to informed sources, this adjustment basically continues the ideas from the draft version from June – simply put, it means reducing the capital reserves required for large banks.

This "enhanced supplementary leverage ratio" sounds quite professional, but it actually means that banks are required to hold a certain amount of their own money as a buffer. When the ratio decreases, the amount of money banks can free up increases.

Some institutions have estimated that this round of operations could release between 250 billion to 450 billion US dollars of liquidity into the government bond market. In simple terms, it means there will be a large amount of money available in the market to purchase government bonds. For the financial market, an increase in liquidity often indicates that the funding environment will be somewhat more accommodative.