Trump administration to reduce banking bases designed to prevent collapse similar to 2008: Report
According to what was reported, the United States government is preparing to announce the decline in banking regulations that will provide financial institutions more flexible.
President Trump administration is preparing to announce a decrease in the percentage of supplementary leverage (SLR) for the US Capital Reserves, The Financial Times (FT) ReportsQuoted by people whose name is not revealed to be aware of this issue.
Organizers have originally implemented the current SLR bases as part of BASEL III in 2014, with the aim of preventing the repetition of the global financial crisis 2008-2009. But some have argued that the regulations hinder the market and the financial industry.
Greg Bayer, head of the Lobby Group for Banking Policy, says, says
“Punishment of banks to contract low -risk assets, such as the cabinet, undermines their ability to support the market liquidity during times of stress when they are needed … The organizers must now behave instead of waiting for the next event.”
Federal Reserve Chairman Jerome Powell also He said Earlier this year, it was believed that the SLR connection would help “strongly” support the US Treasury Market.
“We need to work on the cabinet market structure, and it can be part of this answer, and I think it will be, which reduces the calibration of the supplementary financial lever.”
But others do not share the same feelings. Nicholas Veron, an older colleague at the Peterson Institute for International Economy, told seats that given the current risks of American banks, the role of the dollar and the direction of the economy, it is now not the time to relax capital standards.
Under Basel III, important banks (SIBS) in the United States must maintain the supplementary leverage rate (SLR) by 5 % or more at the level of the holding company and 6 % at the level of the insured depositary institution. Meanwhile, many other developed countries are obligated to SLR by 3 %, although some judicial states have suggested or implemented a little higher standards ranging from 3.5 % to 4.25 %.
FT sources have not determined what the exact percentage is the organizers aimed at, but pressure groups say they want to bring America’s requirements more with international standards.
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