Federal Reserve Releases Plan to Relax Key Bank Capital Rule

The Federal Reserve unveiled plans to roll back an important capital rule that big banks have said limits their ability to hold more Treasuries and act as intermediaries in the $29 trillion market.

The Fed board voted 5-2 on Wednesday to propose changes to what’s known as the enhanced supplementary leverage ratio, which applies to the largest US banks like Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc. The revisions would reduce holding companies’ capital requirement under the ratio to a range of 3.5% to 4.5%, from the current 5%. Their banking subsidiaries would see that requirement lowered to the same range from 6%.