Fed Said to Be Finishing Proposal to Ease Up on Bank Leverage

The transcript discusses the coordination among US banking regulators, including the FDIC, and their efforts to align with international standards set by Basel. It highlights the potential changes in regulatory leadership and the implications for policy implementation. The leverage ratio and its impact on capital requirements for different asset classes are also explained, with a focus on the debate over capital weighting for cash deposits.

Which of the following is true about the potential changes in banking regulations?

• They can only happen with Congress's approval.

• They can occur without the FDIC's agreement.

• All banking regulators must always agree.

• They are solely decided by the FDIC.

What is Basel's primary function in the context of banking?

• To provide financial aid to banks.

• To regulate only European banks.

• To suggest banking rules for jurisdictions to implement.

• To enforce banking rules globally.

What is the role of individual jurisdictions like the Fed in relation to Basel's suggestions?

• To enforce Basel's rules without changes.

• To create their own independent rules.

• To ignore Basel's suggestions.

• To implement Basel's suggestions as they see fit.

What does the leverage ratio help determine?

• The salaries of bank executives.

• The risk weighting of assets held by banks.

• The interest rates for loans.

• The number of branches a bank can open.

Why do banks argue against capital weighting for cash deposits?

• Cash deposits are not profitable.

• Cash deposits are not regulated by Basel.

• Cash is considered highly risky.

• Cash deposits are seen as safe and should not require capital weighting.