Federal Reserve Governor Stephen Miran speaks during an interview with CNBC on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 10, 2025. REUTERS/Brendan McDermid

By Pete Schroeder

WASHINGTON (Reuters) -Federal Reserve Governor Stephen Miran on Wednesday called for regulators to exempt U.S. Treasury bonds from a key bank leverage ratio, arguing agencies should go further than previously proposed plans.

The Fed in June proposed overhauling how much capital large global banks must hold against relatively low-risk assets, as part of a bid to boost participation in Treasury markets.

The proposal reforms the so-called "enhanced supplementary leverage ratio" so that the amount of capital banks must set aside is directly tied to how large a role each firm plays in the global financial system.

The Fed and other bank regulators opted not to advance a plan that would have exempted some Treasury securities from the requirement altogether, although it did solicit feedback on that option.

Miran argued in prepared remarks delivered to a banking industry group that exempting Treasury debt would "insulate" the Treasury market, as banks would not be disincentivized from holding those securities in times of turmoil. He noted regulators made just such an exemption during the COVID-19 pandemic.

"Removing these securities from the leverage ratio, as was suggested as an alternative in the proposed rule, would help insulate the Treasury market from stressful episodes when liquidity is in short supply," he said.

The June eSLR proposal was the first step in a major deregulatory effort led by the Fed's new top regulatory official, Vice Chair for Supervision Michelle Bowman.

The U.S. Senate in September narrowly confirmed Miran to the Fed board, expanding President Donald Trump's influence over the world's most important central bank. Miran is expected to return to his post as a top White House economic advisor when his term as a Fed governor ends in January.

(Reporting by Michelle Price and Pete Schroeder; Editing by Andrea Ricci)