Analysis
Analysis: More dealer capacity can help absorb Treasury supply, but larger holdings alone do not establish how resilient the market would be during severe stress.
What Bowman reported on October 1
Federal Reserve Vice Chair for Supervision Michelle Bowman presented an initial assessment of changes to the enhanced supplementary leverage ratio, a bank-capital backstop. She said supervisory data showed dealers’ Treasury positions rising from roughly $600 billion at the start of the modification period to over $700 billion by the end of April.
The increase was concentrated among firms that had previously maintained the lowest eSLR buffers. Bowman interpreted the pattern as evidence that additional regulatory capacity supported Treasury intermediation.
What remains uncertain
These are Bowman’s initial findings and interpretation, not a new regulatory decision or independent proof of causation. The position figures describe the period through April, not October market holdings.