Exploding Fed Balance Sheet Risks Unintended Brake on Bank Loans
- Fed eases bank leverage rule, but may need to take more action
- Treasury Department may have to issue more bills to help out
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The Federal Reserve took a step to avoid crowding out some commercial bank lending with its exploding balance sheet. It may eventually have to do more.
The central bank said on Wednesday that that it was temporarily easing banks’ leverage ratios in order to increase their ability to provide credit to households and businesses hard hit by the fallout from the coronavirus.