The Federal Reserve (Fed) announced on April 1, 2020 that it would temporarily exclude U.S. Treasuries (USTs) and banks’ deposits with the Fed (Fed deposits) from its calculation of banks’ supplementary leverage ratio or SLR. The action is the latest aggressive measure by the Fed[1] to help ensure the flow of risk and liquidity through the financial system. It is set to last until March 31, 2021. Below are some frequently asked questions relevant to liquidity investors about the new rule.
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