Archive · 18 Jun 2025
US Regulators Plan to Ease Capital Rules for Banks
The government is thinking of changing a rule that says how much money big banks need to keep on hand.
This rule affects how banks buy and sell US government bonds, called Treasuries.
The change would let banks keep less money aside, which could make it easier for them to trade these bonds.
Some people think this is a good idea because it could help the bond market.
But others worry that it might not actually help and could make banks riskier.
The government will be talking about this change soon.
US bank regulators plan to ease a capital rule for large banks.
The enhanced supplementary leverage ratio (eSLR) is the focus of the changes.
The proposal would lower the eSLR capital requirement to 3.5% to 4.5%.
Industry says the current rule limits bank's ability to trade in Treasuries.
Critics worry easing the rule might not boost Treasury market activity.
- Who
- US bank regulators are considering the changes.
- What
- US regulators plan to ease capital rules for large banks.
- When
- The Fed will meet on June 25 to discuss the plan.
- Where
- The changes affect US banks.
- Why
- To address concerns about constraints on trading in the Treasury market.
Concerns over easing capital requirements
Potential Benefits of rule changes
Impact of rule changes
Concerns over easing capital requirements
Critics argue that easing capital requirements will make the financial system more fragile.
Potential Benefits of rule changes
Industry says the current rule limits bank's ability to add to those securities in times of volatility.
Proposed Solutions
Concerns over easing capital requirements
Eased requirements won't remedy market issues and will just make the financial system more fragile.
Potential Benefits of rule changes
Regulators are looking to relax leverage ratio standards in a bid to bolster banks' roles in the market.
- Focus of Changes
- Enhanced Supplementary Leverage Ratio (eSLR)
- Proposed eSLR Range
- 3.5% to 4.5%
- Current eSLR
- 5%
- Banks Affected
- Largest US Banks
- Meeting Date
- June 25
