Systemic banks could free $156bn of capital after Fed plea
Banks asked to use management buffers to support economy in combating coronavirus
The US Federal Reserve has urged banks to use their capital buffers to back loans to households and businesses hit by the coronavirus. If all eight systemic US banks depleted their risk-based capital buffers, this would free up roughly $156 billion of Common Equity Tier 1 (CET1) capital – reducing their aggregate ratio of CET1 to risk-weighted assets (RWAs) to 9.7%, from 12.1%.
Top US banks must hold enough CET1 to meet minimum requirements and mandatory buffers. A firm that falls below its
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