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The Federal Reserve intends to propose a measure designed to ease bank leverage regulations, enabling larger banks to engage more dynamically in transactions within the U.S. Treasury market. This proposal involves modifying the calculation method for the "Supplementary Leverage Ratio" (SLR) to align it with a bank's overall risk profile, as opposed to mandating uniform capital requirements. Fed Chairman Powell explained that this shift aims to transform leverage ratios into a protective measure rather than a restrictive one for banks. Michelle Bowman, the newly appointed Vice Chairman for Supervision, views this as an initial step towards alleviating bank oversight. Nevertheless, critics express concern that this approach might elevate risks within the financial system and exacerbate underlying vulnerabilities that could lead to financial crises.
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