Fed unveils proposal to ease bank leverage requirements

Capital Requirement Changes - The Fed is announcing a proposal to ease capital requirements for the biggest banks [2] - The proposal would reduce tier one capital requirements by 1.4% for the biggest banks [2] - This reduction is expected to release approximately 13 billion USD in capital [3] - Capital requirement would decline in aggregate by 210 billion USD at their depositories institution subsidiaries [3] Supplementary Leverage Ratio (SLR) - The SLR, or supplementary leverage requirement, involves a ratio where the numerator is capital requirement and the denominator includes all assets, including risk-free assets like treasuries [3] - Banks have argued that the SLR restricts their ability to intervene in treasury markets during stress or take additional deposits during crises [4] Dissent and Potential Risks - Some Fed members, like Michael Barr, argue that the proposal weakens the banking system by releasing capital requirements and reducing buffers during times of stress [4] - The decision to ease capital requirements was not unanimous within the Fed [5]