The Federal Reserve proposed to lower the enhanced supplementary leverage ratio (eSLR) by 1.4%, giving bank holding companies a significant capital relief of approximately 13 billion USD for increased market stability. Jerome Powell emphasizes the need for updated regulations due to an increase in low-risk assets.
Despite support from some Fed officials like Michelle Bowman and Christopher Waller, who argue it aids Treasury stability, concerns remain over potential misuse of freed capital for shareholder returns, which contradicts the original purpose of post-crisis regulations.
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