Morgan Stanley expects the Fed's relaxation of leverage requirements to free up $185 billion in capital

Odaily News Morgan Stanley estimated on Thursday that the Federal Reserve's plan to relax leverage rules could free up $185 billion in capital and unlock nearly $6 trillion in balance sheet capacity. The Federal Reserve on Wednesday unveiled a proposal to revise the capital requirements of large global banks for relatively low-risk assets to boost participation in the U.S. Treasury market. The Fed voted 5 to 2 to approve the plan, which is the first batch of possible deregulatory measures under the leadership of Bowman, the Fed's new vice chairman for supervision. The proposal would reform the so-called "enhanced supplementary leverage ratio" so that the amount of capital banks must set aside is directly linked to the role they play in the global financial system. (Jinshi)