The Fed Is Ending One of Its Pandemic Relief Programs This Month. Here's How It Will Impact Banks.
At this time last year, we found ourselves in the beginning stages of the coronavirus pandemic. Many were confused about what it meant for their own lives and for society in general. Investors were spooked by the impact lockdowns would have on the economy, and the S&P 500 tanked 32% from peak to trough last March.
As turmoil descended on financial markets, the Federal Reserve threw the kitchen sink at the issues to keep markets operating effectively. The Fed cut interest rates, restarted quantitative easing (QE), purchased corporate bonds, and provided banks with relief on their supplementary leverage ratio (SLR) -- a ratio used to measure a bank's risk.
The Federal Reserve recently announced that it would not be extending the relief program that changes the calculation of the SLR and will let the program lapse on March 31, 2021. Here's what this means for investors and the banking sector in general.
Source Fool.com
