A zombie US capital ratio comes back to life

SLR rollback could mark the return of 1990s Tier 1 leverage ratio as a binding constraint

Zombie capital

A largely forgotten US capital ratio from the early 1990s is threatening to derail the Federal Reserve's regulatory response to the Covid-19 crisis, prompting bank supervisors to consider additional measures.

The rule, known as the Tier 1 leverage ratio, was first introduced in 1991 and preserved in the Collins Amendment to the Dodd-Frank Act. It requires banks to hold 4% capital against average total on-balance-sheet assets.

After stricter capital rules were relaxed, this is becoming a

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here