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U.S. bankers seize on repo-market stress to push for softer liquidity rules


Added 09-18-19 07:03:02pm EST - “Big U.S. banks are using the recent chaos in short-term funding markets as an op...” - Reuters.com

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Posted By TheNewsCommenter: From Reuters.com: “U.S. bankers seize on repo-market stress to push for softer...”. Below is an excerpt from the article.

WASHINGTON (Reuters) - Big U.S. banks are using the recent chaos in short-term funding markets as an opportunity to pressure the Federal Reserve to ease liquidity requirements they have long despised.

On Wednesday, a major industry lobbying group and the chief executive of the largest U.S. bank criticized Fed-imposed standards of how much idle cash banks must keep on hand, blaming a liquidity rule that is hated on Wall Street for causing market jolts in recent days.

“Banks have a tremendous amount of liquidity, but they also have a lot of restraints on how they could use that liquidity and how much they have to maintain at the Fed,” JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon said at an event in Washington hosted by the Business Roundtable, a corporate trade association he chairs.

Another group, the Bank Policy Institute, published an essay here by its chief economist, Bill Nelson, who said policymakers should rethink liquidity requirements imposed since the 2007-2009 global financial crisis.

“The volatility this week should cause everyone to worry about how the financial system will behave the next time a financial shock places strains on market liquidity,” Nelson wrote.

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