Federal Reserve waives Banks leverage by the end of this month

The Federal Reserve said today that it will not extend a temporary regulatory holiday for the epidemic due to its expiration this month, so major US banks should resume keeping an additional layer of loss-absorbing capital against US Treasury bonds and central bank deposits from next month.

The Fed added that, however, it would launch a formal review of capital rules, known as the complementary leverage ratio, due to concerns that they are no longer functioning as intended as a result of the central bank's emergency monetary policy measures. The Federal Reserve nearly doubled its balance sheet last year to more than $ 7.7 trillion by purchasing bonds of about $ 3.4 trillion. This unusual intervention, combined with near-zero interest rates, aims to keep money flowing through the banking system.