Associations Urge Extension Of Modified Supplementary Leverage Ratio

SIFMA, the American Bankers Association and the Financial Services Forum (collectively, the "Agencies") urged the Federal Reserve Board ("FRB") to extend a temporary interim final rule ("IFR") amending the Supplementary Leverage Ratio ("SLR"). The IFR is set to expire on March 31, 2021.

As previously covered, the FRB adopted the IFR in April 2020, which allowed bank holding companies to increase their leverage by excluding (i) U.S. Treasury securities and (ii) deposits at Federal Reserve Banks from the SLR.

In a comment letter, the Agencies stated that an extension of the IFR would enable banking organizations to continue to accept deposits and act as intermediaries in the U.S. Treasury market. The Agencies cited the "unprecedented expansion" of the FRB balance sheet - projected to top $10 trillion by the end of 2021 - as the harbinger to the substantial growth of deposits at large domestically chartered banks. The Agencies explained that the "deposit surge has