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Billions Idled at Banks After Regulators Balk at Following Fed

April 7, 2020, 8:00 AM

Two key bank regulators are holding off on easing Wall Street debt limits in response to the coronavirus pandemic, leaving billions of dollars locked up at banking subsidiaries that could be used for lending amid the deepening economic crisis.

For now, the Federal Reserve is the only U.S. banking watchdog that’s relaxed a landmark leverage rule that stipulates how much capital banks must hold against their assets. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., which also enforce the rule, have privately indicated they aren’t yet ready to follow its lead, said three...

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