In House testimony Wednesday, Federal Reserve Chair Jerome Powell said a proposal to ease capital requirements for U.S. banks could also improve the functioning of the all-important U.S. Treasury market.
“I strongly think it would help,” Powell said when asked by Kentucky Congressman Andy Barr about such proposals.
Banks are key buyers in the nearly $30 trillion market for U.S. Treasury debt, but their role is constrained by rules called supplementary leverage ratios, which limit the size of a bank’s asset book relative to its capital.
