Financial Repression Tracker

Rules that steer savings into government debt or hold returns below inflation, country by country.

Steer · Prudential sovereign bias

Leverage-ratio exclusions for government securities and central-bank reserves

What it is
Regulators remove Treasury securities and/or central-bank deposits from the denominator of the leverage ratio, typically as a temporary crisis measure.
Why it counts
Frees balance-sheet capacity for banks to absorb government bond issuance and central-bank reserves without needing extra capital.

When it was in force

  • United States: 2020 → 2021, historical
  • Canada: 2020 → 2021, historical
  • European Union: 2020 → now, in force

3 examples

  1. United States

    2020 → 2021Historical

    Bank holding companies could exclude Treasuries and Fed deposits from total leverage exposure until 31 March 2021.

    Federal Reserve interim final rule, Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks From the Supplementary Leverage Ratio, 85 FR 20578 (14 April 2020)Primary source
    “to exclude the on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks. This exclusion has immediate effect and will remain in effect through March 31, 2021.”

    govinfo.gov (opens in a new tab)Checked: quote matched on the page by script

    United States today: index 42.9

  2. Canada

    2020 → 2021Historical

    As cited: 2020-2021 (sovereign securities); reserves until April 2023

    Canadian deposit-takers could exclude central bank reserves and sovereign-issued HQLA securities from leverage exposure.

    OSFI temporary leverage ratio exclusions announced 9 April 2020 (letter of 13 September 2022 on their unwind)Primary source
    “DTIs could exclude central bank reserves and sovereign-issued securities that qualify as High Quality Liquid Assets (HQLA) under the Liquidity Adequacy Requirements Guideline from their leverage ratio exposure measures.”

    osfi-bsif.gc.ca (opens in a new tab)Checked: quote matched on the page by script

    Canada today: index 31.3

  3. European Union

    2020 → nowIn force

    The EU brought forward the option to exclude certain central bank exposures from the leverage exposure measure.

    Regulation (EU) 2020/873 (CRR 'quick fix'), amending Article 429a of Regulation (EU) No 575/2013Primary source
    “the possibility of temporarily excluding certain exposures to central banks from the calculation of an institution's total exposure measure, as laid down in Article 429a”

    eur-lex.europa.eu (opens in a new tab)Checked: quote matched on the page by script

    European Union today: index 44.0

Examples and their dates reviewed .

Further reading