The Next SLR Skirmish and Why It Matters
As we predicted, federal banking agencies didn’t back down: the SLR exemption for central-bank reserves and Treasuries is no more as of April 1. This is big, bad news to big banks flooded with deposits and eager to continue to distribute capital, but the longer-term, strategic question is what’s next. The Fed – although not necessarily also the OCC and FDIC – also promised Friday to issue a proposal rewriting the SLR more substantively. How this happens is a major matter for mortgage finance.
