US Federal Reserve said it made the decision after consulting with other bank regulators
The US Federal Reserve Board voted Friday to keep its countercyclical capital buffer at zero percent, saying it would not order banks to hold additional capital to protect against losses in a future economic downturn. The Fed said it made the decision after consulting with other bank regulators.
The tool is intended to direct banks to build up capital during times when the economy is strong to bolster resilience in future recessions.
The Fed has however never triggered it, even at the tailend of the record-long expansion that ended in February with the coronvirus pandemic and the current recession.
Governor Lael Brainard, who had repeatedly advocated for raising the buffer before the current crisis, did not dissent on Friday's decision.
