SLR
BankingDefinition
Supplementary Leverage Ratio. Required US bank capital divided by total leverage exposure (assets + off-balance-sheet items). Minimum 3% (5% for G-SIBs).
Unlike risk-weighted capital ratios, SLR treats all assets equally — even Treasuries. Was relaxed during COVID to allow banks to absorb deposit + Treasury inflows without cutting other lending. Snap-back caused 2021 funding stress.
Unlike risk-weighted capital ratios, SLR treats all assets equally — even Treasuries. Was relaxed during COVID to allow banks to absorb deposit + Treasury inflows without cutting other lending. Snap-back caused 2021 funding stress.