Bessent says banks' supplementary leverage ratio may be lowered soon


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Treasury Secretary Scott Bessent told Bloomberg News on Friday that the supplementary leverage ratio which banks are required to maintain may be reduced in a matter of months, which he said


could help bring down Treasury yields. “I think we are very close to moving the supplementary leverage ratio, SLR," Bessent said. "That is moving along very quickly between the


three banking regulators — the Fed, the [Office of the Comptroller of the Currency] and the [Federal Deposit Insurance Corp.]. So I would think we could see something on that over the


summer.” Asked whether such a move might have a material effect on Treasury yields, Bessent responded: "Well, I think it could, because banks are being penalized for holding Treasurys.


There's a large supplementary leverage charge. So I think for holding the risk-free asset, we can reduce that, and you know, I've seen estimates that it could bring yields down by


tens of basis points. Certainly during the COVID crisis, it was temporarily taken off, and it had a big effect.”