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US bank regulators have reached an agreement to ease certain capital requirements, potentially allowing banks to hold more US Treasury securities.

Officials from the Federal Reserve and other regulatory agencies recently submitted a final plan for the so-called enhanced supplementary leverage ratio to the White House for review, Bloomberg News reported Tuesday, citing sources familiar with the matter.

The move is part of an effort to tie banks' capital requirements more closely to the size and global impact of each institution.

The enhanced supplementary leverage ratio currently requires banks to hold capital against all assets equally, including low-risk Treasuries.

Critics have argued that this approach discourages banks from holding government debt and limits their role in funding key financial markets.

"The change could help banks allocate capital more efficiently and encourage greater participation in Treasury markets," said one source familiar with the discussions.

The Federal Reserve voted in June to advance the plan, which is designed to reduce the amount of capital that the largest banks must set aside relative to their total assets.

Banking industry groups have long lobbied for such relief, arguing that current rules unnecessarily impede banks' activities and discourage trading in lower-risk assets like US government bonds.

US Banks Gain Flexibility to Trade Government Debt

Officials are targeting a formal adoption of the measure in the coming weeks, pending White House approval, though the timeline for final votes may shift.

The Federal Reserve declined to comment on a Reuters request, while the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency did not immediately respond.

If implemented, the easing of capital rules would mark a notable victory for the deregulatory agenda led by Federal Reserve Vice Chair for Supervision Michelle Bowman.

The change could also help strengthen Treasury market liquidity, giving banks more flexibility to hold and trade government debt amid evolving market conditions.

Analysts note that the move aligns with broader efforts to modernize bank regulations while balancing financial stability with economic growth.

By linking capital requirements to a bank's systemic importance rather than treating all assets equally, regulators aim to encourage investment in low-risk government securities without compromising overall safety.

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