Federal Regulators’ Proposal to Loosen Capital/Liquidity Requirements Could Prompt Banks to Cut MBS Holdings
November 9, 2018
A proposal issued by federal regulators last week to ease certain standards for capital and liquidity will likely prompt banks to reduce their holdings of MBS, according to industry analysts. The complex proposal could prompt a $65.0 billion reduction in bank holdings of MBS, according to estimates by the Federal Reserve and Wells Fargo Securities.