Federal Deposit Insurance Corporation weighs final rule to adjust the enhanced supplementary leverage ratio and cap GSIB bank subsidiary requirements at 1%

The Federal Deposit Insurance Corporation published a board-meeting statement on a final rule to modify the enhanced supplementary leverage ratio (eSLR) standards for U.S. global systemically important banks (GSIBs) and their bank subsidiaries, with the aim of keeping the eSLR more frequently as a backstop to risk-based capital requirements rather than a binding constraint that discourages low-risk, low-return activities. The final rule would be substantially equivalent to the FDIC’s June 2025 proposal, with one change to the calibration for subsidiary depository institutions: the parent GSIB eSLR would remain as proposed, while the bank-subsidiary eSLR would equal 50 percent of the parent company’s Method 1 GSIB capital surcharge, capped at 1 percent. The cap is intended to reflect that the Method 1 surcharge can be materially driven by activities outside bank subsidiaries and to preserve the eSLR’s backstop role for those subsidiaries. The FDIC estimates the changes would reduce aggregate tier 1 capital at the holding company level by approximately USD 13 billion, or just under 2 percent, while increasing capacity for low-risk activities including U.S. Treasury market intermediation and repo financing.