The Federal Reserve chairman said this week that the central bank is unlikely to alter its liquidity requirements for banks, despite turmoil last month in the repo markets.
Fed Chairman Jerome Powell said a change is unlikely for banks and their liquidity requirements.
During a news conference Wednesday, Powell was asked whether the Fed might change the rules for big banks following theaimed at keeping its overnight funds rate within its quarter-point target range, as well as making sure there's enough liquidity in the system to keep the short-term funding operations, known as repo, running smoothly.
The response may not have been what banking executives were hoping to hear, but it could be pleasing to Warren, the Democratic presidential candidate who has been the industry's harshest critic on Capitol Hill., Warren stated that she is concerned banks will use the repo disturbances to try to relax the requirements for how much cash and top-tier assets they must hold on their balance sheets.
Powell said reserves were "well above" the level industry executives deemed comfortable "and yet they didn't deploy that liquidity when there seemed to be great opportunities to do that. That didn't happen. So why is that? We're doing careful analysis of that." "That cash, we believe, is required under resolution and recovery and liquidity stress testing," Dimon said during the bank's earnings call. "And therefore, we could not redeploy it into repo market, which we would have been happy to do. And I think it's up to the regulators to decide they want to recalibrate the kind of liquidity they expect us to keep in that account.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed Chair Powell is 'overdue for a press conference gaffe,' says Wells FargoOn the eve of the Fed's announcement, some on Wall Street started to get flashbacks to Chair Jerome Powell's communication miscues.
Read more »
For Fed Chair Powell, blunt is the 'appropriate' approachUnderstanding central banks is often compared to reading tea leaves: picking up ...
Read more »
Trump rails against Powell day after Fed cuts rates for a third time this yearTrump's reaction followed the Fed's decision to lower interest rates by 25 basis points to a target range of 1.5% to 1.75% — the third cut this year.
Read more »
Powell says the Fed would need to see a 'really significant' rise in inflation before hiking rates'I think we would need to see a really significant move up in inflation that's persistent' before hiking rates again, Powell said Wendesyda.
Read more »
Goldman Sachs sees a more 'hawkish' stance from Jerome Powell after the Fed's likely third rate cut this yearGoldman says today to keep an eye on the language used by the Fed chair, whom the bank says will probably shift to favor tighter policy going forward.
Read more »
US Treasury Secretary Mnuchin is reportedly open to relaxing bank regulations born from the 2008 financial crisisMnuchin's comments arrive just days after Senator Elizabeth Warren warned the Treasury Secretary not to ease the bank regulations.
Read more »