Much Ado About Little – Why Banks Haven’t Utilized Relief of Leverage Ratio Requirements

With banking segments and industries hard-hit by the COVID-19 pandemic, federal regulators offered back in April to give financial institutions temporary relief on leverage ratio requirements — or, put simply, the level of assets they have to maintain in the bank. But, not many banks have taken advantage of the emergency measure in the months since it was enacted.

Patrick Ryan, CEO and president at Hamilton-based First Bank, explained that, as far as local banking institutions such as his are concerned, there’s just not much need for it.

“I don’t want to call it a total nonevent, but the practical reality right now is most banks have the capital they need to lend,” he said. “Leverage ratios are only important if a bank is at or near its capital limit, but the majority of banks aren’t close to those minimum requirements.”

Read the full story over at ROI-NJ: