Treasury Explores Whether to Ease Capital Rule on US Bonds

Deputy Treasury Secretary Michael Faulkender said that US officials are discussing a potential rule change for banks that could reduce risks of a freeze-up of trading in the $29 trillion Treasuries market.

Scrutiny of the regulation, known as the Supplementary Leverage Ratio, has climbed in the wake of last week’s selloff in US government debt. That slump, the biggest in more than two decades, had stoked fears of a March 2020-type market meltdown. The Federal Reserve and other overseers would need to approve any change, though the Treasury secretary chairs the council of regulators focused on US financial stability.