Rethinking Leverage Ratios: Why US Treasuries Should Be Exempt Artwork

The SIFMA Podcast

SIFMA is the voice of the nation’s securities industry, bringing together the shared interests of hundreds of broker-dealers, banks and asset managers. We advocate for effective and resilient capital markets. Our podcast brings together market and industry experts to make the connection between public policy and finance.

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The SIFMA Podcast

Rethinking Leverage Ratios: Why US Treasuries Should Be Exempt

April 24, 2025 • SIFMA

In this episode of The SIFMA Podcast, SIFMA Chief Operating Officer Joseph Seidel is joined by Dr. Guowei Zhang, Managing Director at SIFMA, to unpack the critical role of leverage ratios in the U.S. Treasury market – and why exempting them from leverage ratio calculations may be key to strengthening market resilience.

Together, they explore:

How current leverage ratio requirements, implemented in 2018, may limit banks’ capacity to intermediate in Treasury markets.
SIFMA’s latest analysis quantifying the impact of U.S. Treasury holdings on bank leverage ratios.
Evidence from the temporary exemption during the COVID-19 pandemic, and what it tells us about future policy considerations.

With over $28 trillion in outstanding Treasury securities and an average of $910 billion traded daily, the stakes are high. As volatility continues to challenge financial markets, this conversation shines a light on potential policy solutions that support both market stability and economic growth.

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