While U.S. banks like Goldman Sachs (GS) and Morgan Stanley (MS) are keeping their liquidity pools untouched, European banks across the water are shrinking their liquidity to help boost their leverage ratios, the Financial Times reports.

The publication says, "The recent downward trend at Barclays, Deutsche Bank and SocGen points to what one senior European bank executive calls a “frightening prospect”: bankers, prompted by the need to comply with the leverage ratio rules, are becoming complacent about liquidity buffers"