Federal Deposit Insurance Corporation considers final eSLR changes for US GSIBs with bank subsidiary standard capped at 1%

The Federal Deposit Insurance Corporation published a board-meeting statement from Acting Chairman Travis Hill on a final rule to modify the enhanced supplementary leverage ratio (eSLR) standards for US global systemically important banks (GSIBs) and their bank subsidiaries, aiming to keep the eSLR more often as a backstop to risk-based capital requirements rather than a binding constraint. The final rule would be substantially equivalent to the June 27, 2025 proposal, with one change for bank subsidiaries. While the parent GSIB’s eSLR standard would remain as proposed, the bank subsidiary eSLR standard would be set at 50 percent of the parent company’s method 1 GSIB capital surcharge, capped at one percent, reflecting that the method 1 surcharge can be meaningfully driven by activities outside bank subsidiaries. The FDIC estimated the final rule would reduce aggregate tier 1 capital at the holding company level by approximately USD 13 billion, just under two percent, and would provide additional capacity for low-risk activities including US Treasury market intermediation and repo financing.