US Federal Reserve retains countercyclical capital buffer at zero

(Reuters) – The U.S. Federal Reserve Board voted Friday to maintain its countercyclical capital buffer at zero %, saying it will not order banks to carry extra capital to guard towards losses in a future financial downturn.

The Fed mentioned it made the choice after consulting with different financial institution regulators.

The instrument is meant to direct banks to construct up capital throughout occasions when the is robust to bolster resilience in future recessions.

The Fed has nevertheless by no means triggered it, even on the tailend of the record-long growth that led to February with the coronvirus pandemic and the present recession.

Governor Lael Brainard, who had repeatedly advocated for elevating the buffer earlier than the present disaster, didn’t dissent on Friday’s resolution.


(Reporting by Ann Saphir and Dan Burns)

(Solely the headline and movie of this report might have been reworked by the Enterprise Commonplace employees; the remainder of the content material is auto-generated from a syndicated feed.)

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