US Fed to let leverage exemption expire on March 31, will review rule

Big US banks will have to resume holding an extra layer of loss-absorbing capital against US Treasuries and central bank deposits from next month after the Federal Reserve said it would not extend a temporary waiver that had exempted those assets from a key bank leverage rule.
 

On Friday, the Fed said it would, however, review the "supplementary leverage ratio" rule due to concerns it is no longer functioning as intended as a result of the central bank's emergency pandemic monetary policy measures.
 

Shares of the largest US banks dropped in pre-market trading on Friday immediately following the Fed's announcement.

JPMorgan