Fed considering to use countercyclical capital buffer for downturn - WSJ

Eren Sengezer FXStreet

According to the Wall Street Journal, Federal Reserve officials are considering to use countercyclical buffers to reduce the risk of a credit crunch in a downturn.

"It allows the Fed to require banks to hold more loss-absorbing capital should the economy show signs of overheating, or to keep less of it during bad economic times," explained the WSJ's Lalita Clozel.

The initial market reaction to this article weighed on the Greenback and the US Dollar Index broke below its daily range to drop to 97.35 in the last minutes.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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