Quarles: Fed would recalibrate eSLR if Crapo bill passes

Quarles: Fed would recalibrate eSLR if Crapo bill passes

April 18, 2018, Risk Magazine

Randy Benjenk is quoted in a Risk Magazine article regarding Randal Quarles' indication that the Federal Reserve will need to revisit its plans to recalibrate the enhanced supplementary leverage ratio for the largest banks if changes to the eSLR also become law. According to Benjenk, the agencies’ attempt to front-run the Crapo bill now looks too little, too late. “One way to interpret the Fed and OCC issuing this proposal is they may have had a feeling the proposal might ward off the need for the custody bank leverage ratio provisions in the Senate banking bill, but the time to have made this fix, to ward off those changes, would have been several months if not years ago ward off those changes, would have been several months if not years ago,” he says. On the other hand, Benjenk does not expect the agencies to back down with their changes just because of the exception for custodial institutions contained in the Senate bill. As a result, both changes to the leverage ratio are likely to be introduced together.