US Banking Rule Overhaul: SLR Reduction to Below 4% Signals Regulatory Shift

Washington regulators are poised to dismantle a cornerstone of post-2008 financial reform by slashing the supplementary leverage ratio (SLR) from 5% to under 4%. This technical adjustment carries systemic implications—freeing up billions in bank capital while reigniting debates about financial stability.

The proposed relaxation targets the unweighted equity requirement for major banks, a buffer designed to prevent another Lehman-style collapse. Advocates argue the change will boost Treasury market liquidity and credit availability. Critics warn it undermines a critical safeguard against excessive risk-taking.

Market participants anticipate ripple effects across asset classes. cryptocurrency traders are particularly watchful—regulatory easing for traditional finance often correlates with increased risk appetite that flows into digital assets. The move comes as Bitcoin and Ethereum show renewed institutional interest following ETF approvals.