Fed’s leverage ratio relief puts foreign banks on the back foot
European banks cannot – yet – exempt US Treasuries from their exposure measures
US banks caught a big break from the Federal Reserve yesterday (April 1) when it excluded US Treasuries and reserve balances from the calculation of the supplementary leverage ratio (SLR). No similar easing has been offered to European banks by their watchdogs, however, placing them at a capital disadvantage to their US peers.
The Fed granted the temporary relief to US bank holding companies and the intermediate holding companies (IHCs) of foreign lenders, and said it would reduce binding
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