FIA, ISDA and SIFMA strongly support the proposed recalibration of the Enhanced Supplementary Leverage Ratio and urge the Federal Reserve, FDIC, and OCC to finalize the proposal as soon as possible, with an effective date no later than 1 January 2026.
The policy goals include: 1) helping to restore the eSLR to its proper role as a backstop to risk-based capital requirements and 2) mitigating limitations on the ability of banking organizations to intermediate in U.S. Treasury markets, which is particularly pressing given the impending industry move to mandatory clearing for U.S. Treasurys.
While the three trade associations would support further refinements to leverage capital requirements to achieve those policy goals to an even greater extent, any further refinements should not delay a final rule being effective by January 1, 2026.
More broadly, and consistent with US Federal Reserve Vice Chair for Supervision Bowman’s recent comments, the agencies should conduct a comprehensive review of the US regulatory capital framework and, based on that review, implement appropriate reforms. These reforms should recognize that the current framework has pushed activity outside of the banking sector and reflect changes to avoid that dynamic. The trade associations urge the agencies to coordinate with the US Treasury Department and other Financial Stability Oversight Council member agencies to design a regulatory capital framework that addresses the broader economic policy concerns and goals raised by Secretary Bessent. For example, the agencies should make changes to recognize the risk-reducing benefits of cross-product netting and cross-margining arrangements.
