The US Fed is restoring capital requirement for big banks

The capital requirement rules put in place after the 2008 financial crisis to ensure big banks have enough capital to survive a financial meltdown were relaxed last year to shore up the financial system during the coronavirus pandemic’s early days.

The United States Federal Reserve says it will restore capital requirements for large banks that were relaxed as part of the Fed’s efforts to shore up the financial system during the early days of the coronavirus pandemic. The Fed said it will not extend the relief from what is called the supplementary leverage ratio past March 31. The easing of the regulation had been intended to give banks flexibility in what assets they could hold to meet regulatory requirements during the turmoil of the pandemic, when banks were having to suddenly write down billions of dollars of loans. The banking industry had lobbied for an extension of the relief, but on Thursday the Fed said that since the requirements were relaxed last year “the Treasury market has stabilised.”