😎 Spring 2023 😎

SVB blows up in 48H, then Signature and First Republic follow.

The fiasco: the bank loaded up on Treasuries at ~1.5% / rates got hiked / the securities went underwater.
On paper everything's fine (at face value) In reality - a goose egg.
Such "paper" losses across the system by the end of 2025 - ~$306B.
Until recently the regulator promised to count it all honestly.
Now let's break down the revamped scheme for 2026.

The scheme:

eSLR - FREED UP $219B

On November 25, 2025, the federal reserve / OCC / FDICgov rewrote the leverage rule for systemically important banks.

Tier 1 capital requirements at their "subsidiaries" were cut by ~28% - roughly $219B that they NO LONGER have to hold as a cushion.

Vote at the Fed: 5 against 2 / Barr and Cook against ("overkill").
Passed anyway - took effect April 1, 2026.

**Without a single vote in the House BASEL III ENDGAME

The 2023 version raised requirements on the largest banks by nearly 30%.

The current version: under the new Vice Chair for Supervision, Bowman - CUTS capital across the system by ~$87.7B. They called this move "proper calibration," but in fact it's a rollback of the tightening.

AOCI It was precisely the failure to count underwater securities in capital that finished off SVB.
Essentially the one place where they smeared the terms across 6 years, leaving room to "maneuver":

regional banks' "don't count the losses" option (opt-out) is being eliminated, meaning the portfolio drawdown is finally being forced straight into capital.

The transition is stretched out to 2032.
In year one you exclude 100% of the loss, and only by 2032 - the goose egg.

• What's actually happening?
• Capital is being freed up NOW, while the one hole (the one that killed SVB) is being smeared out over 6 years at a leisurely pace.

NOW THE MAIN THING - WHERE'S CONGRESS, WHICH WAS SUPPOSED TO PUT THE BRAKES ON THIS?

Senator Warren tried to repeal eSLR via a resolution (S.J.Res.110), introduced March 4, 2026. After that it went to committee and quietly died (the resolution) without a single vote. 0 cosponsors + the window closed.

• So what's the trick of this whole act?
• Publicly - "we've learned the lessons of SVB, the system is sturdier."

In fact:

1) the cushion was cut by $219B immediately
2) the Basel tightening was turned into a loosening
3) the one honest item (counting the losses) was put on the brakes until 2032.

And all of this - by a decision of 3 agencies, bypassing the House + Congress didn't even get to a vote.

😎😎😎😎