Wall Street wants capital rules eased to unblock $22tn Treasury market

Wall Street analysts and lobbyists are calling for the Federal Reserve to ease capital requirements to improve liquidity in the $24tn Treasury market as part of an ongoing review of rules governing the nation’s largest banks. A Bloomberg index measuring liquidity in the Treasury market hit its worst levels in late 2022 since the market shock of March 2020. Banks have long argued that reducing their capital requirements by exempting Treasuries and cash reserves from calculations of their so-called “supplementary leverage ratios” (SLR) would allow them to participate more in the market.