Last week, the US federal banking regulators proposed changes to the enhanced supplementary leverage ratio (“eSLR”) requirement for US global systemically important bank holding companies (“US GSIBs”). This proposal is intended to reduce the likelihood of the eSLR requirement being the binding capital constraint for US GSIBs and, thereby, enhance the ability of US GSIBs to hold low-risk assets. A key policy objective of the Proposal is to bolster the resiliency of the US Treasury market. The US federal banking regulators also requested comments on exempting certain US Treasury securities from the supplementary leverage ratio (“SLR”) requirement that applies to US GSIBs and Category II and III banking organizations.
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