US regulators relooking safety rule costs

Washington

JUST as memories of the financial crisis are fading and tough new banking regulations are beginning to bite, some current and former regulators wonder whether one of the rules is too much of a burden for markets and taxpayers.

At issue is the requirement that the largest US banks set aside US$6 of capital for every US$100 of assets on their books - double what they had to hold before.

Because this so-called Supplementary Leverage Ratio (SLR) rule applies to all bank assets including Treasuries, it has made owning that ultra-safe government debt and related trades more expensive.

Wall Street has complained about costs of many measures designed to make the financial system safer, but regulators have been firm. However, when banks argue that the SLR, which came into force early las…