US FDIC Eases Capital Rule Tied to US Treasuries

US FDIC Eases Capital Rule Tied to US Treasuries

According to market sources, the US Federal Deposit Insurance Corporation has relaxed a key capital requirement relating to US Treasury holdings as of November 25.

Fact Check
The evidence strongly and consistently supports the truthfulness of the statement. Multiple high-authority, high-relevance sources directly confirm that the FDIC, along with other U.S. regulators, approved a change to a key capital rule related to U.S. Treasuries. Specifically, reports from Reuters, Bloomberg, and the American Bankers Association's journal explicitly state that regulators relaxed the supplementary leverage ratio (SLR). These sources are independent yet corroborate each other, reporting that the FDIC board approved the measure, which is designed to lower capital requirements for large banks associated with their holdings of U.S. Treasuries. The Congressional Research Service report, a highly authoritative source, provides crucial context by identifying potential changes to the SLR as a key policy option for addressing disruptions in the Treasury market, which makes the reported action highly plausible. Sources that do not directly confirm the statement do not contradict it either. They are either predictive (anticipating the meeting), refer to a proposal rather than a final rule, discuss an older, expired rule change from 2021, or pertain to a different, though related, capital rule (the Community Bank Leverage Ratio). There is no conflicting evidence from credible sources. The convergence of information from top-tier financial news and industry publications provides a solid foundation for concluding the statement is true.
    Reference12
Summary

On November 25, market sources reported that the US Federal Deposit Insurance Corporation (FDIC) eased a significant capital rule affecting banks’ holdings of US Treasuries. This step is part of regulatory adjustments aimed at providing banks with more flexibility in managing capital requirements, particularly those tied to government debt securities.

Terms & Concepts
  • Federal Deposit Insurance Corporation (FDIC): A US bank regulator that insures deposits and oversees financial institutions.
  • US Treasuries: Government debt securities issued by the United States Department of the Treasury.
  • Capital Requirement: A regulatory standard that sets the minimum amount of capital banks must hold relative to their assets.