Similarly,
Fed wants authorize banks have:
The American Federal Reserve fed wants authorize banks have (Fed) unveiled. Moreover, Wednesday, June 25, its softening plan for a key regime in terms of capital for large banks, which, according to her, could facilitate transactions on the treasury market.
The Council of Governors of the Fed voted 5 votes to 2 to modify a rule introduced after the 2008 financial crisis. Similarly, which requires that banks have a certain amount of capital compared to their assets in order to better resist economic upheavals.
Their proposal provides for lowering the demand for equity. or “Additional reinforced lever ratio”which is currently 5 % for the most important banks. This plan will be the subject of a period of public consultation of sixty days.
The rule was initially implemented as a “Safety net”recalled. on Wednesday, the president of the Fed, Jerome Powell. But. according to the latter, the banks increased the amount of “Relatively safe and low risk” active “ in their balance sheets for ten years and, consequently, “He is careful” For the Fed of “Reconzerate [son] initial approach “. The boss of the monetary institution does not want “Disper[r] banks to participate in low -risk activities ”especially on. the bond market.
“Strengthen market resilience” – Fed wants authorize banks have
Allowing banks to invest more importantly in the obligations would. in theory, cause the relaxation of interest rates, as well as relief from the cost of the debt of the American state. In addition to the Fed. the Federal Deposit Insurance fed wants authorize banks have Corporation (FDIC), which provides bank deposits, will also meet on Thursday to discuss the modifications to be made to this measure.
Michelle Bowman. vice-president of the Fed responsible for supervision, said, in a separate statement, that “The proposal will help strengthen the resilience of the US Treasury markets”. She said she would reduce “The risk of market dysfunction. the need for the federal reserve to intervene” In case of financial jums.
However. some governors have issued reservations, fed wants authorize banks have like Michael Barr, who warned the fact that by reducing the size of these capital, this could increase the risk of bankruptcy of banking establishments.
The president of the American Bankers Association. Rob Nichols, qualified the proposal for a key step to stimulate the financial system and “Reduce banking financing costs”. “We urge regulators to act as quickly as possible to finalize these essential reforms”he added.
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