Federal Register: FRB Temporarily Eases Supplementary Leverage Ratio

A Federal Reserve Board ("FRB") interim final rule temporarily amending the calculation of total leverage exposure within the supplementary leverage ratio of the FRB regulatory capital rule was published in the Federal Register. Comments must be submitted by May 29, 2020.

As previously covered, the calculation of total leverage exposure has been amended to allow bank holding companies to increase their leverage by excluding from the denominator of the ratio (i) Treasuries and (ii) deposits at Federal Reserve Banks. Due to the emergency nature of the rule change and the need to stimulate economic activity, the FRB issued the temporary rule without prior notice or prior opportunity for comment.

The interim final rule will remain effective until March 31, 2021.