US Treasury Secretary Scott Bessent has signalled that the long-debated overhaul of banks\u2019 supplementary leverage ratio (SLR) is imminent\u2014a policy pivot that could reverberate through Bitcoin markets\u2014telling television interviewers that regulators are \u201cvery close to moving\u201d on the rule and that the adjustment could compress Treasury yields by \u201ctens of basis points.\u201d<\/p>\n
Although the proposal must still clear the Federal Reserve, the Office of the Comptroller of the Currency and the FDIC, the direction of travel is clear: exempting, or partially exempting, US Treasuries from the SLR will let large banks recycle balance-sheet capacity into fresh purchases of government debt.<\/p>\n
The SLR, introduced after the 2008\u20132009 crisis<\/a>, forces even risk-free assets such as Treasuries to carry a capital charge; a global systemically important bank must fund five cents of equity for every dollar of total assets, including central-bank reserves. Bessent\u2019s plan would lift that burden for sovereign bonds, a step the industry has lobbied for since the temporary pandemic waiver expired in March 2021. Kevin Fromer, chief executive of the Financial Services Forum, calls the current leverage-based stack \u201coutdated and at odds with financial stability and economic growth,\u201d describing relief as necessary \u201cto better serve US taxpayers, capital markets, consumers, businesses, and the economy.\u201d<\/p>\n While officials frame the move as a micro-prudential calibration, the macro-liquidity impulse is substantial. Market commentator Furkan Yildirim tells<\/a> his 103,000 subscribers that US banks collectively hold about $5 trillion in Treasuries; eliminating the five-percent capital haircut would liberate roughly $250 billion of tier-one capital\u2014fifty times the Federal Reserve\u2019s current monthly quantitative-tightening<\/a> pace of $5 billion. \u201cThis is a liquidity injection by regulatory pen stroke,\u201d he says, adding that the step \u201clowers yields without the Fed printing money,\u201d a mix that historically pushes investors further out the risk curve.<\/p>\n The market is already trading on that expectation. Benchmark ten-year yields slid below 3.95 percent after Bessent\u2019s remarks and after President Trump deferred a threatened 50 percent tariff on EU goods until 9 July. Yildirim argues that \u201cevery basis-point drop in the ten-year is basically a marketing campaign for Bitcoin,\u201d because \u201cliquidity doesn\u2019t disappear\u2014it just looks for a new home.\u201d He stresses that the Treasury\u2019s willingness to change bank-capital rules, rather than rely on the central bank, \u201ctells you how cornered policymakers feel by deficits, debt service and political optics.\u201d<\/p>\n Not everyone is convinced the rule change will work as intended. Critics such as Peter Boockvar of Bleakley Advisory note that banks\u2019 appetite for duration risk has not fully recovered since the 2023 regional-bank failures; if dealers fail to absorb the incremental Treasury supply, the Federal Reserve could be forced back into the market. The Bank Policy Institute, while welcoming SLR relief, argues that it must be paired with a broader rethink of post-crisis overlays such as the GSIB surcharge and the stress-test regime to unlock balance-sheet capacity on a lasting basis.<\/p>\n