Supplementary Leverage Ratio

A Supplementary Leverage Ratio (SLR) is a type of alternative investment, specifically a hedge, which is essentially a bet that more liquid capital requirements{{Cite web|url=https://www.wsj.com/livecoverage/cpi-report-today-inflation-stock-market-02-12-2025/card/powell-says-easing-bank-capital-requirements-could-help-treasury-market-s2FgvVH2xlHnNChGEb3o?mod=article_inline|title=Powell Says Easing Bank Capital Requirements Could Help Treasury Market|website=WSJ}} will boost demand for United States Treasury securities (i.e., government bonds).

Established in 2014 as an enhancement of the Office of Financial Research's Bank Systemic Risk Monitor as a part of the Basel III reforms,{{Cite journal|url=https://www.financialresearch.gov/the-ofr-blog/2024/08/02/banks-supplementary-leverage-ratio/|title=Banks' Supplementary Leverage Ratio|first1=Jose Maria|last1=Tapia|first2=Ruth|last2=Leung|first3=Hashim|last3=Hamandi|date=August 2, 2024|via=www.financialresearch.gov}} the financial instrument was broadly used in response to the COVID-19 pandemic.https://www.occ.gov/news-issuances/bulletins/2020/bulletin-2020-52.html{{Cite web|url=https://www.risk.net/definition/supplementary-leverage-ratio-slr|title=Supplementary leverage ratio (SLR) definition - Risk.net|website=www.risk.net}}

They have been posited as being a minor factor{{Cite web|url=https://www.wsj.com/finance/investing/the-simple-explanation-for-this-weeks-treasury-market-mayhem-9351f339|title=The Simple Explanation for This Week’s Treasury Market Mayhem|first=Jon|last=Sindreu|website=WSJ}} in the 2025 stock market crash, when stocks and bonds did not interact in their typical inverse manner.{{Cite web|url=https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-09-25/card/how-a-bet-on-bank-capital-rules-figures-in-the-u-s-treasury-rout-I4PzCNB8b6Ea1pFiCTgu|title=How a Bet on Bank Capital Rules Figures in the U.S. Treasury Rout|website=WSJ}}{{Cite web|url=https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-09-25?mod=WSJ_home_supertoppertop_pos_1|title=Stock Market Today: Dow and S&P 500 Surge; Trump Says 90-Day Pause on Some Tariffs, Raises China to 125% — Live Updates|website=WSJ}} Margin calls, i.e. demands for collateral, are suspected of having reversed some attempted SLR trades.{{Cite web|url=https://www.wsj.com/finance/investing/bond-rout-stirs-broader-fears-about-market-strains-18eca23a|title=Bond Rout Stirs Broader Fears About Market Strains|first=Gregory Zuckerman and Sam|last=Goldfarb|website=WSJ}}{{Cite web|url=https://www.wsj.com/finance/investing/us-treasury-bonds-selloff-tariffs-investors-e503b398?mod=WSJ_home_supertoppermiddle_pos_3|title=Why the Selloff in Treasurys Is Rattling Investors|first=Chelsey Dulaney and Caitlin|last=McCabe|website=WSJ}}

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