Fed temporarily eases some bank leverage rules

Apr. 01, 2020 7:18 PM ETCitigroup Inc. (C), JPM, BAC, WFC, GS, MS, BNKU, BNKD, BNKO, KNAB, BNKZBAC, JPM, GS, C, MS, WFC, BNKU, BNKD, BNKO, BNKZ, KNABBy: Liz Kiesche, SA News Editor75 Comments
  • Banks will be able to exempt any holding in U.S. Treasury debt or deposits at the Fed from their calculations of supplementary leverage ratio, or SLR, a leverage restriction imposed on the largest U.S. banks.
  • The move would help ease strains in the Treasury market and encourage banks to continue lending; the exemption will stay in place until March 31, 2021.
  • The SLR, applies to banks with more than $250B in assets, was put in place after the 2008 financial crisis that saw banks nearly collapse after a crisis in mortgage lending.
  • The rule, which directs banks to hold a certain percentage of capital as a cushion against its assets, is intended to ensure the largest institutions had an extra layer of protection against any potential downturns.
  • Related ticker: C, JPM, BAC, WFC, GS, MS.
  • ETFs: BNKU, BNKD, BNKO, KNAB, BNKZ

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