Federal Reserve Board's Bowman discusses eSLR reforms at Atlantic Council

Michelle W. Bowman: Michelle W. Bowman serves as Vice Chair for Supervision on the Board of Governors of the Federal Reserve System, overseeing supervision and regulation of depository institution holding companies and other financial firms. As the only Board member with banking and state supervisory experience, she chairs the Subcommittee on Smaller and Regional Community Banking and serves on multiple committees including Payments, Clearing, and Settlement. She delivered the speech on modernizing financial regulation at the Atlantic Council 2026 CEO & Senior Management Summit, sharing initial observations on eSLR reforms. Federal Reserve Board: The Federal Reserve Board is the central governing body of the Federal Reserve System responsible for monetary policy, bank supervision, and financial stability. It recently recalibrated the enhanced supplementary leverage ratio standard in coordination with other agencies to address unintended constraints on Treasury market intermediation. The Board finalized these changes in November 2025, with the rule effective April 1, 2026, and optional early adoption from January 1, 2026. Financial Stability Board: The Financial Stability Board monitors and makes recommendations about the global financial system to promote stability. Michelle W. Bowman serves as the U.S. Plenary member and chairs its Standing Committee on Supervisory and Regulatory Cooperation. Her international roles complement the domestic focus on eSLR reforms in her recent speech. Federal Deposit Insurance Corporation: The Federal Deposit Insurance Corporation is an independent agency that provides deposit insurance and supervises financial institutions. It joined the Federal Reserve Board and the Office of the Comptroller of the Currency in finalizing the recalibrated eSLR standard to better align leverage requirements with risk-based capital rules. The changes were designed to promote international consistency with Basel Committee frameworks. Basel Committee on Banking Supervision: The Basel Committee on Banking Supervision develops international standards for banking regulation to promote financial stability. Its leverage ratio framework informed the recent U.S. eSLR recalibration to ensure consistency across jurisdictions. The revisions align U.S. requirements more closely with the Committee's approach to supplementary leverage ratios. Office of the Comptroller of the Currency: The Office of the Comptroller of the Currency charters, regulates, and supervises national banks and federal savings associations. It participated alongside the Federal Reserve Board and FDIC in adopting the updated eSLR buffer standards tailored to each GSIB's systemic footprint. The joint final rule became effective in 2026 following early adoption by most U.S. GSIBs. Federal Financial Institutions Examination Council: The Federal Financial Institutions Examination Council promotes consistency in the examination and supervision of financial institutions across federal agencies. Michelle W. Bowman chairs this interagency body in addition to her Federal Reserve duties. It supports coordinated regulatory efforts highlighted in discussions of ongoing modernization. Market Impact: Dealers increased Treasury market positions following the eSLR revisions, with the increase concentrated among firms previously most constrained by the prior rule. Regulatory Reform: The Federal Reserve Board, in coordination with the FDIC and OCC, finalized changes to the eSLR to tailor the buffer to each GSIB's systemic footprint rather than applying a uniform standard. Regulatory Modernization: Regulations are periodically reviewed and updated when data and market feedback indicate they are not functioning as intended, supporting both market resilience and efficient capital allocation.