Looser US leverage rules may lift Treasury

THE banking industry is optimistic that US regulators will soon move to change how much capital they set aside against typically safe investments, particularly after the turmoil in Treasury markets last month.

Such a move to revamp the “supplementary leverage ratio” could reduce the amount of cash banks must reserve, freeing them up for more lending or other activities, and could incentivise banks to play a larger role in intermediating Treasury markets.