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Strategies & Market Trends : Currents of Currency

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From: Ahda	9/3/2014 12:14:15 PM
	of 594

Market PulseFed, FDIC to require banks to hold easily tradeable assets By [url=]Greg Robb[/url] Published: Sept 3, 2014 10:10 a.m. ET By GregRobb Senior economics reporter WASHINGTON (MarketWatch) - U.S. bank regulators Wednesday are voting to require the largest U.S. banks to hold more easily tradeable assets to fund their operations during periods of market stress. The rules, to be voted on by the Federal Reserve and the Federal Deposit Insurance Corp., are designed to require banks to hold enough "high quality" assets that can easily be converted into cash to fund their operations for 30 days if other sources of finance freeze up, as happened during the financial crisis of 2008. The final rule makes several key changes to the proposal set out last October, expanding the pool of publicly traded stocks to include stocks in the Russell 1000 index RUI, -0.09% rather than the more limited S&P 500 Index SPX, -0.12% And bowing to pressure from state and local governments, the Fed opened the door to allow some highly liquid municipal bonds to qualify as safe assets. The central bank said it would develop criteria to allow some highly liquid municipal bonds to qualify as high quality assets. The Fed said that the 35 banks covered by the rule have a shortfall of about $100 billion of the $2.5 trillion of safe assets required when the rule is fully-phased in in January 2017. A Fed official said he did not see any shortage of Treasury securities developing as a result of the rule. I have a headache and what about the states that have almost been in BK debt that cannot be paid but must be overlooked. There is no slap of the hand but continual slappa de buck in the hand.

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