A Quiet Rule Change with Loud Implications for LCs

A recent S&P Global Ratings report on bank capital markets performance noted that the relaxation of the Enhanced Supplementary Leverage Ratio (eSLR) in late 2025 has already opened the door for the largest US banks to hold more trading assets, and projects capital markets revenue to rise 5-15% in 2026 as a result. The finding is a useful prompt for trade finance practitioners to understand what the eSLR actually is, how it interacts with Basel capital requirements, and why it matters for LC issuance on both sides of the ledger. The rule took effect April 1, 2026, though banks were permitted to begin applying it from January 1 of this year.