Stimulus Bill Grants Small Banks a Break on Capital Requirements
The $2 trillion stimulus bill expected to soon be signed into law has some nice perks for community banks that hold under $10 billion in assets.
Among them is a provision that would allow these smaller banks to reduce the amount of capital they hold in reserve, decreasing their leverage ratio requirement from 9% to 8%.
The current regulations regarding banks' leverage ratios were put into place following the financial crisis as a way to better ensure that they would be prepared to cover heavy loan losses should the need arise. The ratio specifically measures the core capital of a bank relative to its total assets.
Source Fool.com
