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US Regulators Plan to Ease eSLR Ratio for the Biggest Lenders
June 18, 2025
US regulators plan to lower the enhanced supplementary leverage ratio (eSLR) for major banks including JP Morgan, Morgan Stanley and Goldman Sachs, from 5.0% to 3.5–4.5% at the holding company level and from 6.0% to the same range at the subsidiary level. This aims to ease capital constraints and improve liquidity in the $29tn US Treasury market. While this gives banks more balance sheet room, past experience (e.g., 2020) suggests they may use it for shareholder payouts instead of buying Treasuries, as per Jeremy Kress, a former Fed bank-policy attorney who now teaches business law at the University of Michigan. The Fed will review the proposal on June 25.
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