Great question #SLR
Powell: “We are working on it. Don’t have particulars & timing. We want the Leverage Ratio (SLR) to be a “Backstop” to Risk Based Capital Requirements. When Leverage Ratios are Binding it does skew incentives for firms to substitute Low Risk Assets for High Risk Ones.. it’s a…
“….straightforward thing…& because of the substantial increase in Reserves, “Treasuries” & other Safe Assets in the Banking System the SLR is “Rapidly Ceasing to be the intended Backstop” that we want it to be.”
- Powell $XLF 🔥🔥🔥🔥🔥
- Powell $XLF 🔥🔥🔥🔥🔥
The fact that they are taking a “hard look” at this also means that they are looking at SCB as well as GSIB Scores to also encourage Sheet Deployment into Loans.. keep Supply Situation all clear for Money Demand/Loan growth in 2H21 with accelerated Reopening & Inventory Build.
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