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Fed signals SLR reform as way to bolster Treasury market intermediation
Summary
Officials previewed a proposed notice seeking comment on changes to the Supplementary Leverage Ratio and related rules that Fed leaders say have discouraged bank intermediation in the Treasury market.
Federal Reserve Chair Jerome Powell told the House Financial Services Committee that the Fed supports reforms to the supplementary leverage ratio (SLR) and related leverage measures to reduce unintended constraints on bank intermediation in the Treasury market.
“When the leverage ratio is binding, it discourages banks from undertaking low margin, fairly safe activities such as intermediation in the Treasury markets,” Powell said. He added the Fed will…
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