Banks Pounce on Crisis to Loosen Leverage-Ratio Rules for Good

June 16, 2020, 2:22 PM

It took a global financial crisis more than a decade ago to prompt stricter capital rules for U.S. banks. Now, the industry is hoping this year’s crisis in markets will show regulators why they should relax them.

The industry is pushing to make permanent a temporary change by the Federal Reserveto exempt holdings of U.S. Treasuries and cash from calculations of bank leverage ratios. The Fed’s move was meant to ease strains in the Treasury market in the wake of chaos in March as investors rushed to raise liquidity in the face of the spread of the coronavirus.


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