Fed Vice Chair for Supervision Michelle Bowman stated on October 6 that the Fed plans later this year to revise fixed-dollar asset thresholds in prudential rules to account for inflation and economic growth since those levels were originally set. The adjustment would preserve the original policy intent by rescaling thresholds rather than changing the underlying regulatory framework.
For Armada's traditional repo desk, the practical effect could be meaningful. Mid-tier banks currently sitting above enhanced prudential or G-SIB surcharge thresholds might fall below adjusted levels, freeing balance sheet and SLR capacity that directly affects their willingness to intermediate repo. This matters for pricing, counterparty capacity, and FICC clearing access, particularly during mid-quarter balance sheet stress periods when dealer retreat from repo has historically tightened SOFR spreads.