Bloomberg Law
March 23, 2020, 11:25 AM

Top U.S. Banks Can Lend $1.6 Trillion Using Excess Capital (1)

Yalman Onaran
Yalman Onaran
Bloomberg News

U.S. banks have plenty of capital piled up that can let them boost lending as clients come calling to cope with economic disruption caused by the coronavirus.

Capital buffers at the biggest U.S. banks should give them the ability to increase lending by $1.6 trillion, according to Bloomberg calculations. By deploying their excess capital, the eight largest lenders alone could expand their balance sheets by $1 trillion.

The Federal Reserve has encouraged the nation’s leading banks to use so-called management buffers -- capital that’s in excess of required regulatory minimums -- to boost the economy. Firms can also dip into ...