A Supplementary Leverage Ratio (SLR) is a type of alternative investment, specifically a hedge, which is essentially a bet that more liquid capital requirements [1] will boost demand for United States Treasury securities (i.e., government bonds). Established in 2014 as an enhancement of the Office of Financial Research's Bank Systemic Risk Monitor as a part of the Basel III reforms, [2] the financial instrument was broadly used in response to the COVID-19 pandemic. [3] [4]
They have been posited as being a minor factor [5] in the 2025 stock market crash, when stocks and bonds did not interact in their typical inverse manner. [6] [7] Margin calls, i.e. demands for collateral, are suspected of having reversed some attempted SLR trades. [8] [9]
