August 22, 2018 / 8:02 PM / a month ago

U.S. banking regulators ease liquidity rules for municipal securities

WASHINGTON, Aug 22 (Reuters) - U.S. banking regulators said on Wednesday they were easing liquidity rules on the treatment of municipal securities, allowing banks to count more of the assets against certain liquidity requirements.

The interim final rule, announced by the Federal Reserve, allows banks to treat “investment grade” municipal securities as “high quality liquid assets,” similar to cash and U.S. Treasury bonds, in order to comply with rules requiring banks to hold easily sold assets as a cushion against future downturns. The regulatory change was mandated by a law easing bank rules signed by President Donald Trump in May. (Reporting by Pete Schroeder; Editing by Richard Chang)

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