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by mikeyouse
1202 days ago
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Post GFC, regulators started assigning risk weightings to bank assets — cash and treasury bills are “riskless” by this metric, most other things aren’t. So if you need $100 of reserves, that can be $100 of treasuries or $200 of car loans or $400 of mortgage backed securities. For obvious reasons, their balance sheets are heavily invested in treasuries now. https://www.investopedia.com/terms/t/tier-1-capital-ratio.as... |
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