A House Financial Services task force hearing on primary dealers and Treasury-market resilience drew unanimous attention to three policy levers members and witnesses said could expand market intermediation: full implementation of Treasury central clearing, targeted capital relief for dealers, and steps to broaden financing access.

Susan McLaughlin, an executive fellow at the Yale School of Management, told the panel that the growth of marketable Treasury debt is a “first‑order risk” to market resilience and that measures already underway — Treasury buybacks, recent adjustments to the enhanced supplementary leverage ratio, and the SEC’s central‑clearing rule — are helping but may not be sufficient alone. McLaughlin urged lawmakers to consider market‑structure changes such as central clearing and all‑to‑all trading to add durable capacity.

Representatives of independent dealers and market infrastructure stressed complementary priorities. A witness representing the Independent Dealers and Traders Association argued that financing and repo access are the binding constraints for many market participants and recommended broader eligibility for the Fed’s standing repo facility and standardized minimum haircuts to limit unchecked leverage for hedge funds.

Lara Klimpel, managing director and head of FICC at DTCC, described industry preparations for the SEC’s clearing mandate, noting that mandatory clearing deadlines are currently set for cash transactions on 2026‑12‑31 and repo on 2027‑06‑30. Klimpel said FICC has expanded access models, separated house and customer activity, and created segregated customer margin accounts; she cited that FICC cleared routinely more than $11 trillion per day and hit a recent peak of $13.2 trillion.

Dr. Haoxong Zhu of the MIT Sloan School of Management said central clearing delivers three principal benefits — reducing counterparty risk, providing standardized and transparent risk management, and freeing up significant balance‑sheet capacity — and recommended additional post‑trade transparency, oversight for trading platforms, and a greater role for floating‑rate Treasury issuance to reduce interest‑rate risk.

Committee members pressed witnesses on the interaction between central clearing and capital rules. Witnesses explained that moving offsetting dealer activity into a central counterparty collapses gross exposures into net positions, which both reduces risk and lowers the leverage exposure that feeds into ratios such as the SLR. But they cautioned that central clearing and SLR relief are complementary, not redundant: clearing can remove gross exposure while capital adjustments change the computed ratio.

Panelists emphasized there is no single “elixir.” Expanding the number of primary dealers alone would do little without changes that increase net intermediation capacity or reduce demand for intermediation. The hearing closed with the committee requesting additional written questions and witness responses by 2026‑01‑07.