US dealers’ leverage adequacy hits two-year high on repo compression
Lower repo exposures freed up capacity for derivatives and off-balance sheet items in third quarter
US systemic dealers bolstered their leverage buffers to the highest level in more than two years during the third quarter, as lower repo activity offset a hike in exposures for derivatives and off-balance sheet assets.
The eight US global systemically important banks (G-Sibs) reported an aggregate supplementary leverage ratio (SLR) of 6.1% at end-September, up nine basis points on end-June and the highest since Q1 2021’s 7%.
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