The U.S. Federal Reserve announced on Wednesday it was temporarily easing its leverage rules for large banks by exempting certain investments from a key leverage calculation, part of the effort to combat the economic slowdown caused by the coronavirus pandemic.
Now, banks will be able to exempt any holdings in U.S. Treasury debt or deposits at the Fed from their calculations of the supplementary leverage ratio, an additional leverage restriction imposed on the largest U.S. banks.
The exemptions, which the Fed said will help ease strains in the Treasury market and encourage banks to continue lending, will stay in place until March 31, 2021.
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