SIFMA Statement on the Importance of Exempting Treasuries from Leverage Ratios

Washington, D.C., May 15, 2025 – SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, on the need for policymakers to examine exempting Treasuries from leverage ratios to enhance market resiliency:

“Bank-affiliated brokers-dealers are key intermediaries in the U.S. Treasury market. Current capital rules require banks to meet risk-based requirements and two leverage ratios.  These leverage ratios, being non-risk-sensitive, often become binding constraints during flight to quality or dash for cash episodes, causing brokers-dealers to reduce their market intermediation activities at just the wrong time. With U.S. Treasury issuance set to grow rapidly, and with the current volatility in the market top of mind, we urge policymakers to exempt Treasuries and central bank deposits from leverage ratio calculations going forward to ensure banks can effectively intermediate the Treasury market.”

In April, SIFMA submitted letters to relevant regulators further expanding on these views, which can he found here.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.