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Fed Votes Against Activating Tool Aimed at Safeguarding Banks

  • Brainard offers lone dissent in Fed Board’s 4-1 vote
  • Counter-cyclical capital buffer would cushion against stress

The Federal Reserve decided on Wednesday against activating the counter-cyclical capital buffer -- a tool that would require big banks to set aside extra money to absorb potential loan losses.

The Fed said its board voted 4-1 to keep the buffer at zero, with Governor Lael Brainard lodging the only dissent. The central bank is supposed to vote on the issue annually.