Finance:Supplementary Leverage Ratio
From HandWiki
A Supplementary Leverage Ratio (SLR) is a type of alternative investment, specifically a hedge, which is essentially a bet that more liquid capital requirements[1] will boost demand for United States Treasury securities (i.e., government bonds). Established in 2014 as an enhancement of the Office of Financial Research's Bank Systemic Risk Monitor as a part of the Basel III reforms,[2] the financial instrument was broadly used in response to the COVID-19 pandemic.[3][4]
They have been posited as being a minor factor[5] in the 2025 stock market crash, when stocks and bonds did not interact in their typical inverse manner.[6][7] Margin calls, i.e. demands for collateral, are suspected of having reversed some attempted SLR trades.[8][9]
References
- ↑ "Powell Says Easing Bank Capital Requirements Could Help Treasury Market". https://www.wsj.com/livecoverage/cpi-report-today-inflation-stock-market-02-12-2025/card/powell-says-easing-bank-capital-requirements-could-help-treasury-market-s2FgvVH2xlHnNChGEb3o?mod=article_inline.
- ↑ Tapia, Jose Maria; Leung, Ruth; Hamandi, Hashim (August 2, 2024). Banks' Supplementary Leverage Ratio. https://www.financialresearch.gov/the-ofr-blog/2024/08/02/banks-supplementary-leverage-ratio/.
- ↑ https://www.occ.gov/news-issuances/bulletins/2020/bulletin-2020-52.html
- ↑ "Supplementary leverage ratio (SLR) definition - Risk.net". https://www.risk.net/definition/supplementary-leverage-ratio-slr.
- ↑ Sindreu, Jon. "The Simple Explanation for This Week’s Treasury Market Mayhem". https://www.wsj.com/finance/investing/the-simple-explanation-for-this-weeks-treasury-market-mayhem-9351f339.
- ↑ "How a Bet on Bank Capital Rules Figures in the U.S. Treasury Rout". https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-09-25/card/how-a-bet-on-bank-capital-rules-figures-in-the-u-s-treasury-rout-I4PzCNB8b6Ea1pFiCTgu.
- ↑ "Stock Market Today: Dow and S&P 500 Surge; Trump Says 90-Day Pause on Some Tariffs, Raises China to 125% — Live Updates". https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-09-25?mod=WSJ_home_supertoppertop_pos_1.
- ↑ Goldfarb, Gregory Zuckerman and Sam. "Bond Rout Stirs Broader Fears About Market Strains". https://www.wsj.com/finance/investing/bond-rout-stirs-broader-fears-about-market-strains-18eca23a.
- ↑ McCabe, Chelsey Dulaney and Caitlin. "Why the Selloff in Treasurys Is Rattling Investors". https://www.wsj.com/finance/investing/us-treasury-bonds-selloff-tariffs-investors-e503b398?mod=WSJ_home_supertoppermiddle_pos_3.
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