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Powell Suggests More Bank Leverage Relief Would Help Borrowers

Jerome Powell speaks during a virtual news conference on July 29.

Jerome Powell speaks during a virtual news conference on July 29.

Photographer: Andrew Harrer/Bloomberg

Federal Reserve Chair Jerome Powell said that while U.S. banks are well capitalized, a temporary relaxation of their leverage ratios could help support credit in the economy.

“It would give us the ability to allow banks to grow their balance sheet,” Powell said at a press conference Wednesday, referring to potential legislation in Congress for a broader easing in capital standards. The Fed has already implemented a limited measure, temporarily removing holdings of Treasuries from the calculation.