by Looks like it might be the game-changer we've (MNE) been looking for the last few years... will have to look at it some more... looks good on surface...Prior to this the Fed was quickly bankrupting the Depositories in a similar way they caused the GFC back in September 2008... they have been adding 100s of $B of non-risk assets for the last few months and even have accelerated the rate over the last two weeks...It may have been so bad that the banks would not have even been able to originate the new SBA loans this week... they simply have had too many non-risk assets put on them by the Fed...We may have at least dodged this bullet of incompetence... now we just have to deal with the REAL Wuhan Virus...Need to see this new policy in a bit more detail but I'm optimistic at first look....
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Looks like it might be the game-changer we've (MNE) been looking for the last few years... will have to look at it some more... looks good on surface...
Prior to this the Fed was quickly bankrupting the Depositories in a similar way they caused the GFC back in September 2008... they have been adding 100s of $B of non-risk assets for the last few months and even have accelerated the rate over the last two weeks...
It may have been so bad that the banks would not have even been able to originate the new SBA loans this week... they simply have had too many non-risk assets put on them by the Fed...
We may have at least dodged this bullet of incompetence... now we just have to deal with the REAL Wuhan Virus...
Need to see this new policy in a bit more detail but I'm optimistic at first look....
the Federal Reserve Board on Wednesday announced a temporary change to its supplementary leverage ratio rule. The change would exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the rule for holding companies, and will be in effect until March 31, 2021.
Liquidity conditions in Treasury markets have deteriorated rapidly, and financial institutions are receiving significant inflows of customer deposits along with increased reserve levels. The regulatory restrictions that accompany this balance sheet growth may constrain the firms' ability to continue to serve as financial intermediaries and to provide credit to households and businesses. The change to the supplementary leverage ratio will mitigate the effects of those restrictions and better enable firms to support the economy.
To ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses, @federalreserve announces a temporary change to its supplementary leverage ratio rule: https://t.co/PICcr9V0Ue— Federal Reserve (@federalreserve) April 1, 2020