Banks Said to be Seeking Clarity on Leveraged-Lending
Bloomberg reported that Wall Street banks are seeking additional details from U.S. regulators on their leveraged-lending guidelines, which are intended to improve underwriting standards.
Bloomberg said, citing three people with knowledge of the discussions, that three industry groups representing lenders from JPMorgan Chase to Credit Suisse are preparing a letter to the Fed, the OCC and FDIC asking the regulators for more clarity on the kinds of loans they deem too risky.
Bloomberg notes, according to one of the people, while the supervisors are discouraging loans that raise debt levels to more than six times a measure of a company’s profitability, the groups want to know if the same standards apply to companies that typically rely on more leverage.
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