Marsh McLennan, the world's largest insurance broker, is pressing U.S. regulators to cut the capital banks must hold against loans backed by credit risk insurance, aiming for a decision by the end of the year.

The campaign targets a gap between U.S. and European rules. In Europe, credit risk insurance frees up regulatory capital for lenders; in the United States it does not. That asymmetry, Marsh argues, is pushing American banks toward less efficient hedging tools precisely as artificial-intelligence-related lending surges.

Azi Larsen, a managing director in Marsh's credit specialties practice, told Bloomberg that U.S. banks have already shifted to other instruments for AI-related financing because insurance delivers no relief on regulatory capital. "We've been doing a lot of advocacy around that in the U.S.," she said. "Hopefully we'll have a positive answer from the U.S. regulators at the end of the year."

What are the Fed's plans for capital rules?

A decision could come within months. Federal Reserve Vice Chair for Supervision Michelle Bowman said Tuesday that the central bank expects to finalize its newest capital rules within weeks. According to Bloomberg, the package is likely to include a proposal trimming the capital surcharge on the largest U.S. lenders, plus a second measure changing how much risk-based capital midsize and large banks must hold.

Whether those rules address the treatment of insured loans remains to be seen. Marsh's lobbying gives regulators a specific ask: recognize credit risk cover as a capital mitigant, as European supervisors already do.

How does credit risk insurance work in Europe?

European banks have used the product for years to limit losses and free up capital for additional lending. The mechanics are straightforward: a bank pays premiums to an insurer, which in return covers a portion of the losses on individual loan facilities.

The biggest AI-era deals are already running through that channel. Barclays has sought insurance protection on more than $10 billion in debt tied to data centers, Bloomberg reported. HSBC has examined a comparable deal.

Marsh itself places credit risk insurance on project financings, including data center transactions. As AI-related lending grows, U.S. lenders are adopting the product to cap potential losses on particular borrowers or sectors, Larsen said — capital relief or not.

"Even if they don't get capital relief, they still see value in trying to use it," she said.

Larsen added that lenders now view alternative risk management as "mission critical," because debt is expected to fund a larger share of data center spending going forward.

Why are banks cautious on AI lending?

The numbers explain the nervousness. At least $1 trillion in data center debt will come due over the next five years — roughly $200 billion a year — and banks are becoming more selective about which developers receive loans.

The selectivity is already visible in deal structures. In October, JPMorgan Chase and Goldman Sachs pulled back from fully underwriting a $5 billion loan package for the AI cloud startup Volta Infrastructure Holdings, according to the report. The banks underwrote a $1.3 billion term loan but left a separate $3.7 billion chip loan without an underwrite — meaning more than 70 percent of the original package lacked committed bank backing.

For Marsh, the stakes are commercial as much as regulatory. Every dollar of AI infrastructure financing that flows through credit risk insurance rather than other hedges expands its brokerage business. Winning U.S. capital recognition would accelerate that shift by making the product cheaper, in capital terms, for American lenders.

What happens next?

The Fed's finalization of its capital package in the coming weeks will signal whether Marsh's advocacy has landed. If Bowman's rules include recognition of insured loan risk, the roughly $1 trillion of maturing data center debt over five years could reprice around a new hedging benchmark.

If they do not, U.S. banks will keep paying the full regulatory freight on insured AI loans — and Europe's lenders will keep the advantage.