Office of the Comptroller of the Currency approves interagency proposal to risk-tailor enhanced supplementary leverage ratio to 3.5 percent–4.25 percent for GSIBs

The Office of the Comptroller of the Currency approved an interagency notice of proposed rulemaking to modify the enhanced supplementary leverage ratio (eSLR) for the largest and most systemically important banking organizations, with the aim of making the leverage standard a backstop rather than a primary binding constraint. The proposal would reduce the tier 1 capital requirement for depository institution subsidiaries of global systemically important bank holding companies (GSIBs) to enable more efficient capital allocation within groups while not materially changing overall capital maintained by banking organizations. The eSLR for both the GSIB holding company and its depository institution subsidiary would be set based on the firm’s risk profile, using the Federal Reserve’s GSIB surcharge framework, instead of applying a uniform add-on. The resulting eSLR would range from 3.5 percent to 4.25 percent, lower than the current 5 percent requirement at the holding company and 6 percent at the depository institution. For covered depository institutions, the proposal would also shift the eSLR from a prompt corrective action “well-capitalized” threshold to a buffer intended to act as an early warning measure rather than automatically triggering prompt corrective action limitations, and it is framed as supporting low-risk activities and the functioning of U.S. Treasury markets. Stakeholders are invited to submit comments for consideration as the agencies move toward any final rule.