US set to chop capital necessities for banks, FT studies
(Reuters) -U.S. authorities are making ready to announce one of many largest cuts in capital necessities for banks in additional than a decade, the Monetary Instances reported on Thursday.
Regulators had been poised to scale back the supplementary leverage ratio (SLR) within the subsequent few months, the newspaper reported, citing a number of folks acquainted with the matter.
The SLR is a rule that requires massive U.S. banks to maintain an additional layer of loss-absorbing capital.
The U.S. banking trade is optimistic that regulators will quickly transfer to vary how a lot capital they put aside in opposition to usually secure investments, significantly after the turmoil in Treasury markets final month.
A transfer to revamp the SLR might scale back the amount of money banks should reserve, releasing them up for extra lending or different actions, and will incentivize banks to play a bigger position in intermediating Treasury markets.
U.S. regulators have flagged the SLR as meriting reconsideration and are mulling whether or not to tweak the rule’s formulation to scale back massive banks’ burdens or present aid for terribly secure investments, akin to treasuries.
The Federal Reserve, Federal Deposit Insurance coverage Company and the Workplace of the Comptroller of the Forex declined to Reuters requests for remark.
(Reporting by Mrinmay Dey in Bengaluru; Enhancing by Jamie Freed, Mrigank Dhaniwala and Shreya Biswas)
