JPMorgan Chase and Bank of America have publicly opposed a proposed regulatory change that would remove risk-weighted assets from the denominator of the short-term wholesale funding component of the GSIB surcharge. Goldman Sachs and Morgan Stanley back the change, which would effectively raise the surcharge score for firms with large wholesale funding books relative to RWA, shifting competitive dynamics meaningfully across the dealer community. The split reflects how differently each bank's balance sheet is structured.
For Armada's traditional repo desk, the GSIB surcharge directly governs how much balance sheet the largest dealers allocate to repo intermediation, pricing, and counterparty capacity. A formula change favoring Goldman and Morgan Stanley could tighten dealer supply from JPMorgan and BofA, two of the highest-volume repo counterparties. Armada should model spread and capacity sensitivity under both outcomes as the rulemaking progresses.