Fed’s Ruling On Leverage Assets More Onerous Than Anticipated

Despite BCBS softening its rules, the Fed’s implementation of the Basel definition of leverage assets is a bit more onerous than anticipated, note Credit Suisse analysts.

Moshe Orenbuch and team at Credit Suisse in their Equity Research report dated April 8, 2014 note the most material revision from the original Fed’s July 2013 NPR is the definition of total leverage exposure which now represents the BCBS’ January 2014 definition of total assets.

Enhanced leverage ratio for largest banks

Yesterday, banking regulators took another step to raise leverage ratios for the largest banks in a bid to prevent serious issues from another 2008-like market crash. The largest banks, which will be required...