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Fed says no capital penalty for US debt
08 August 2011
The Federal Reserve has confirmed that it will continue to accept treasuries as collateral but knock-on effects may still be felt for banks, reports Annabelle Palmer
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Federal Reserve
Standard & Poors
Fitch
Moody's
Barings
The Federal Reserve has said that the risk weights for Treasury securities and other securities issued or guaranteed by the US government, government agencies and government-sponsored entities would not change for risk-based capital purposes, following the Standard & Poor's downgrade of the US government from AAA to AA+.The Depository Trust & Clearing Corporation also said that it will not make any changes to the valuations of securities or haircuts required for collateral despite S&P downgrading its AAA...
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