No synchronicity between US banking regulators as Fed pushes leverage rules

Author: John Crabb | Published: 15 Apr 2020

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The US Federal Reserve has eased the calculation of supplementary leverage ratios (SLR) for the country's largest banks for a year as a direct response to the Covid-19 crisis. The move will ease capital and liquidity requirements for the banks and allow them to replace treasuries with loans at the corporate and commercial level. 

The change will exclude US Treasury securities and deposits at Federal Reserve banks from the calculation of the rule for holding companies, and will be in effect until March 31 2021.

Fellow regulators, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), are yet to follow suit. The rule is enforced by all three agencies.

Priya Misra, global head of rates strategy at TD Securities, said that the decision from the Fed is necessary in spite...