The regulation known as the Supplementary Leverage Ratio garnered further attention following a selloff of U.S. debt in April following Trump’s “Liberation Day” tariffs.

The Trump administration is preparing to alter rules on how much Wall Street lenders must set aside to absorb potential losses during times of economic turbulence, Politico reported.  

The plan, being developed jointly by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, could be released in the coming months, the report added, citing people familiar with the matter.

The move would follow years of lobbying by big banks and Republican lawmakers to adjust the rules imposed following the 2008 financial crisis.

They have argued that the rules discourage banks from acquiring U.S. government treasuries, as the current policy requires banks to hold the same amount of capital against both risky loans and safe assets.

“SLR relief would have a benefit to treasury markets. I think it's an important structural reform,” Goldman Sachs CEO David Solomon had said in April.

The rule, known as the Supplementary Leverage Ratio, garnered further attention following a selloff of U.S. debt in April following Trump’s “Liberation Day” tariffs.      

“We are pushing to have this supplementary leverage ratio either reduced or removed, and it will allow banks to buy more Treasuries,” Treasury Secretary Scott Bessent had said in a radio interview earlier in May.

The plans to loosen the restrictions would be a reversal of a Biden-era proposal that recommended a substantial increase in capital requirements.

The Federal Reserve allowed banks to exempt treasuries from SLR calculations during the pandemic, following the COVID-19 lockdown that spooked investors. However, it expired in March 2021.

The 10-year Treasury yield ticked about three basis points lower on Friday, trading at 4.394%. The 2-year yield lost two basis points to 3.897%. The 30-year Treasury yield was flat at 4.921%, according to a CNBC report.

Retail sentiment about the Financial Select Sector SPDR Fund (XLF) was in the ‘bearish’ territory till Friday.

XLF’s Sentiment Meter and Message Volume as of 10:50 p.m. ET on June 1, 2025 | Source: Stocktwits

Wells Fargo & Co (WFC), Citigroup (C), and JPMorgan Chase & Co (JPM) stocks have gained between 6.2% and 9.6% this year, while the Financial Select Sector SPDR Fund is up 4.9%.

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