WASHINGTON, D.C.—Ben Schiffrin and Phillip Basil, Directors of Securities Policy and Economic Growth & Financial Stability, issued the following statement on Better Markets’ new Fact Sheets, “Policymakers Must Bolster the Treasury Market” and “Weakening Bank Capital Will Not Help the Treasury Market but Will Increase Financial Stability Risks”:
“Just last month, we avoided an economic calamity. The administration’s tariff policies caused upheaval in the market for U.S. Treasuries, and the Treasury market is the bedrock of the global financial system. Although the Treasury market eventually stabilized, the episode served as a reminder of the importance of safeguarding the Treasury market.
“Tomorrow, Congress will hold a hearing to examine the fragilities in the Treasury market. Our new fact sheets on the need to bolster the Treasury market discuss those fragilities and the importance of ensuring that the Treasury market runs smoothly both in normal times and in times of stress. The reason is that the Treasury market helps set interest payments for mortgages, credit cards, car loans, and almost any other type of consumer borrowing, so it matters greatly to everyday Americans. It also matters to investors, as almost all investors put money into Treasuries for safe, reliable investments. So policymakers must do everything possible to safeguard the Treasury market and shield consumers from unnecessary volatility, protect investors, and preserve the global financial system. This includes finalizing and implementing SEC rules proposed during the last administration, including rules to bolster trading platforms that allow buyers and sellers to trade Treasuries.
“What policymakers should not do is implement the wish list of Wall Street banks by weakening the supplementary leverage ratio (SLR), which measures the overall size of banks’ financial activities relative to their capital cushions. As our new fact sheet on the SLR shows, undercutting the SLR will not encourage banks to provide more liquidity in Treasuries, especially in times of stress, but will increase the chance of bailouts.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
