Since the financial crisis more than a decade ago, the general attitude about bank capital has been that there is no such thing as too much.

It was in that spirit that on Friday the Federal Reserve reimposed a requirement that big banks hold capital against Treasury bonds and reserves (cash kept on deposit at the Fed) on their balance sheets.

The case for that requirement is flawed. The purpose of holding capital, usually shareholders’ equity, is to absorb potential losses. But Treasurys and reserves are risk-free. With that capital requirement back in place, the Fed achieves nothing toward making the financial system safer while potentially raising headwinds to its other goal: stoking an economic recovery with easy credit conditions.

The Fed exempted Treasurys and reserves from capital requirements a year ago in the midst of the market turmoil triggered by the initial pandemic-related economic shutdown. The central bank didn’t want banks to avoid holding or trading Treasurys because of the capital requirement. The exemption also in theory freed up capital that banks could use to make loans to businesses and households.

The decision announced Friday means the exemption is now due to expire March 31. Banks wanted it to continue but ran into a buzz saw of opposition from progressive Democrats. “The banks’ requests for an extension of this relief appear to be an attempt to use the pandemic as an excuse to weaken one of the most important postcrisis regulatory reforms,” Sens. Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts said earlier this month.