Billions Idled at Banks After Regulators Balk at Following Fed
- FDIC and OCC hold off for now in easing leverage limits
- Agencies still discussing whether to join Fed at later date
The Marriner S. Eccles Federal Reserve building in Washington, D.C.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
Two key bank regulators are holding off on easing Wall Street debt limits in response to the coronavirus pandemic, leaving billions of dollars locked up at banking subsidiaries that could be used for lending amid the deepening economic crisis.
For now, the Federal Reserve is the only U.S. banking watchdog that’s relaxed a landmark leverage rule that stipulates how much capital banks must hold against their assets. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., which also enforce the rule, have privately indicated they aren’t yet ready to follow its lead, said three people familiar with the matter.