Last week, ahead of Jerome Powell's Thursday zoomconference with the WSJ, we wrote why "The SLR Is All That Matters For Markets Right Now." Unfortunately, neither Jerome nor his hapless WSJ interviewer addressed this $64 trillion elephant in the room, but that doesn't mean it has gone away and on the contrary, as Goldman's banking analyst Richard Ramsden writes today, "investor focus on the implications of SLRs approaching minimum requirements and avenues of potential relief has intensied" in light of:
- FDIC Chair McWilliams statement that banks do not need further SLR relief at the bank sub level, and
- Senators Brown and Warrens letter to the Fed requesting no further relief.
Echoing our view, Ramsden then says that he continues to see the SLR as "the most important balance sheet constraint for banks", and one which could require the largest banks to: