eSLR Adjustments and Stock Price Reactions of Eight Global Systemically Important Banks

Srinivas Nippani, Pratima Fnu () and Kenneth M. Washer
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Srinivas Nippani: College of Business, East Texas A&M University, Commerce, TX 75429, USA
Pratima Fnu: College of Business, East Texas A&M University, Commerce, TX 75429, USA
Kenneth M. Washer: Heider College of Business, Economics & Finance—Business, Creighton University, 2500 California Plaza, Omaha, NE 68178, USA

JRFM, 2025, vol. 18, issue 10, 1-12

Abstract: On Wednesday, 25 June 2025, the Federal Reserve voted to make changes to the Tier 1 Capital requirements for eight global systemically important banks. The changes include a cut to the enhanced supplementary leverage ratio (eSLR). The purpose of this study is to examine the immediate impact of this announcement on the stock prices of these eight systemically important banks. Using event study analysis and controlling for interest rate movements and general market conditions, we find that most of these banks generated superior returns during the event period. When compared to the KBW Index, however, results are mixed. Some banks do have superior returns even on pre-event day. The heterogeneous effects among banks emphasize that the benefits of capital regulation changes depend on a bank’s size, structure, and scope of operations.

Keywords: enhanced supplementary leverage ratio (eSLR); global systemically important banks (G-SiBs); event study; capital requirements (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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