The Federal Reserve Board of Governors voted 5-2 to propose lowering capital requirements by changes to the enhanced supplementary leverage ratio (eSLR) standards.

The proposal, along with anticipated similar actions by the other banking agencies, would significantly weaken capital requirements for Wall Street megabanks. Lowering leverage-based capital requirements will fail to alleviate Treasury market pressures and will increase risks to financial stability. Such undercapitalization places the economy at substantially increased risk for another financial collapse.

Notably, Governor Barr and Governor Kugler objected to the proposal, recognizing its unreasonable risk.

Read Better Markets’ statement here.