There has been discussion in recent months about the possibility of large carve-outs in the US Supplementary Leverage Ratio; this follows years of carve-outs in the European version of Basel III. The most recent ideas, including taking US Treasuries out of the Leverage Ratio, open a new window for regulatory races to the bottom, backsliding on global risk standards and other heresies. On the other hand, carve-outs could give a big boost to liquidity and bank balance sheet capability.
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