Insight - Fed trapped by Covid SLR exemption for banks

This emergency move to relax the SLR is set to expire on March 31 – and the Fed has been unusually silent about the SLR’s fate ahead of its policy decision next week

CREDIT Suisse says it is no “magic bullet”. Bank of America insists it’s a “red herring”. And yet, all it takes to whip bond traders into a frenzy is the mention of a three-letter acronym – SLR, or supplementary leverage ratio.

The SLR is a requirement stemming from the Basel III accord that says United States banks must maintain a minimum level of capital against their assets without factoring in risk levels.