Bloomberg reported that the Basel Committee on Banking Supervision diluted a planned debt limit for banks amid warnings that the rule would penalize low-risk financial activities and curtail lending.
Bloomberg said, according to a statement following a recent meeting, the measure, known as a leverage ratio, was adjusted after “thoroughly analyzing bank data.”
The group also modified a liquidity rule to make it easier to count a certain type of central bank loan against regulatory standards, Bloomberg noted and said changes to the leverage rule give lenders more scope to use an accounting practice known as netting to calculate the ratio, and ease proposals on how lenders determine the size of their off-balance sheet activities.
To read the Bloomberg report click here.
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