Martin J. Gruenberg, former Chair of the FDIC and current board member, expressed concern regarding a proposal to amend the enhanced supplementary leverage ratio capital ("eSLR") (see summary here).
In remarks delivered at the Peterson Institute for International Economics, he asserted that the $121 billion proposed reduction in capital requirements at the eight global systemically important banks ("G-SIBs") is a "serious weakening of the post-crisis reforms." Mr. Gruenberg noted that the effective capital requirements in aggregate at the eight G-SIB lead banks would be reduced by about 20 percent.
He reported that currently: "the largest U.S. banking organizations hold roughly twice the capital and more than twice the liquid assets relative to their size than they held entering the crisis." He said that "this makes them significantly stronger financial institutions that are less likely to experience liquidity problems or fail during a period of financial stress."
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