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3/19, 2:10 PM (Source: TeleTrader)
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Fed's SLR exemption to expire on March 31

The Federal Reserve announced on Friday its exemption on the supplemental leverage ratio (SLR) that was introduced at the start of the coronavirus pandemic would expire on March 31.

During the exemption, banks were allowed to temporarily exclude Treasuries at the Fed from their assets when calculating the SLR, thus relaxing capital requirements at a time when the pandemic sparked a liquidity crisis and subsequent selloff in bond markets.

"The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021. The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event," the Fed said in a short announcement.

Breaking the News / JC