Report: JP Morgan Boss 'Not Happy' as Capital Positions Exemption for Big Banks Ends
On March 19, 2021, the U.S. Federal Reserve Board published a
press release that detailed the temporary supplementary leverage ratio
easements will be expiring as scheduled. U.S. banks will no longer have
the relaxed capital requirements they once held since the onset of the
Despite Wall Street’s Protest Federal Regulators Deny SLR Extension
During the first week of March, members of the U.S. Federal Reserve shrugged off concerns over inflation and erratic bond markets. More recently, Fed Chairman Jerome Powell explained
that he looks at bitcoin as a substitute for gold. Now analysts and
economists think the Fed may have some different issues ahead, as the
U.S. central bank is ending the supplementary leverage ratio (SLR)
easements invoked back in April 2020.
“[The] Federal Reserve Board announces temporary change to its
supplementary leverage ratio rule to ease strains in the Treasury market
resulting from the coronavirus and increase banking organizations’
ability to provide credit to households and businesses,” the central
bank noted and enacted at the time.
The loosened rules supplementary leverage ratio meant that banks
could exclude certain items from capital positions like cash and bonds
on their balance sheets. The ruling was a stark difference to the words uttered
back in 2013, when former Chairman Ben Bernanke wanted to “maintain
strong capital positions.” When the Fed eased up on the SLR in April
2020, the central bank and major financial institutions caught a lot of
flak from the media and economists.
SLR Changes Will End March 31, CEO of JP Morgan Is ‘Not Happy’
Bank failures can severely harm an economy and without transparency,
the importance of bank capital can be tossed to the wayside. The major
Wall Street banking institutions attempted to get U.S. regulators to extend the SLR easements but they were ultimately denied.
April 2020, the Federal Reserve exempted big bank’s from certain
capital requirements in order to stabilize the economy because of
Covid-19. Now the temporary supplementary leverage ratio (SLR) easements
will end this month.
CNN Business contributor Matt Egan called the SLR measure the “big
banks’ ‘get out of jail free’ card.” Then on March 19, 2021, the Federal
Reserve Board announced the ending of the SLR provisions from last
“The federal bank regulatory agencies today announced that the
temporary change to the supplementary leverage ratio, or SLR, for
depository institutions issued on May 15, 2020, will expire as scheduled
on March 31, 2021,” the press release details.
“The temporary change was made to provide flexibility for depository
institutions to provide credit to households and businesses in light of
the Covid-19 event.”
A recent report from Bloomberg’s Peter Coy says Jamie Dimon,
the American billionaire businessman and CEO of JP Morgan Chase is “not
happy” with the temporary change ending. Coy also noted that Dimon “may
soon turn away deposits” after revealing a snippet from the January 15
Because the money supply spigot was turned on during the same time
capital requirements easements were enacted, banks have a lot of
liquidity. Coy notes that it’s a “strange problem” and “JP Morgan Chase
and other big banks are getting more assets than they even want.”
What do you think about the supplementary leverage ratio
easements ending on March 31? Let us know what you think about this
subject in the comments section below.