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US Fed to propose easing of post-2008 capital requirement for big banks, Bowman says

( June 6, 2025, 17:17 GMT | Official Statement) -- MLex Summary: Michelle Bowman, in her first speech as the US Federal Reserve’s vice chair for supervision, said the central bank would propose easing a post-Great Recession capital requirement for large banks. Called the enhanced Supplementary Leverage Ratio (eSLR), Bowman said the leverage ratios are meant to act as a "backstop" to risk-based capital requirements, and when they become the binding capital constraint at an excessive level, they can create market distortions. “Banks are less inclined to engage in low-risk activities like Treasury market intermediation and revise their business activities in a way that is neither justified nor responsive to their customer needs,” she said. The eSLR mandates that big banks keep higher core capital relative to their total leverage exposure than required under the general Supplementary Leverage Ratio. Document follows:...

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