Washington, D.C., April 8, 2025 – Today, Tom Wipf, SIFMA Board Member and Managing Director at UBS, currently serving as CEO of Credit Suisse U.S. Entities, testified before the House Financial Services Committee’s Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity at a hearing titled “U.S. Treasury Debt in the Monetary System.” On behalf of SIFMA, Wipf provided an overview of the importance and growth of the U.S. Treasury market, balance sheet capacity, and treasury clearing, and more.

“The U.S. Treasury market remains the most important financial market in the world,” Wipf said. “Any disruption to this market could strain financial stability, given the central role of the U.S. Treasury markets in the global financial system. Any reform of the Treasury market should enhance liquidity and market resiliency and preserve the capacity of dealers and other market participants to meet the growing demand for, and supply of, Treasury securities.”

The testimony covered the following topics:

• Treasury Market Overview: As the largest and most liquid bond market on the planet, U.S. Treasuries are debt instruments issued by the U.S. government to finance its activities. Its smooth functioning is essential to: (1) achieving the lowest cost to taxpayers over time in connection with the financing of our debt, and (2) the overall efficient operation of the financial system and, more broadly, the world economy. U.S. Treasury yields have an impact on the rates that consumers, businesses, and governments pay to borrow money, and the U.S. Treasury repo market is a key transmission mechanism for U.S. monetary policy and is vital to the liquidity of the cash treasury market.
• Growth of U.S. Treasury Market: The Treasury market has grown significantly in recent years. Today, there are $28 trillion Treasury securities outstanding, more than double the total from 2016 ($13.9 trillion) and nearly quadruple the total from 2009 ($7.3 trillion). This trend is likely to continue, as the Congressional Budget Office (CBO) estimates that outstanding debt is expected to hit $48 trillion by 2034.
• Balance Sheet Capacity: While issuance has expanded significantly, the capacity for dealers to intermediate has become increasingly constrained as a result of the application of additional capital and prudential requirements instituted in wake of the Global Financial Crisis. These requirements include the Supplementary Leverage Ratio (“SLR”), which applies to banking organizations with over $250 billion in assets or meet other criteria, and the “enhanced SLR” (“eSLR”), which applies to U.S. global systemically important banks (GSIBs). Beyond these existing leverage requirements, proposed changes, including the original U.S. Basel III Endgame proposal and the revised GSIB surcharge proposal, would have significant effects on overall Treasury market liquidity and raise costs for market participants.
• Treasury Clearing: Further Enhancing Resiliency: Over the past year, SIFMA has been working with its members, both buy side and sell side, and other market participants to develop standardized documentation, policies and procedures to facilitate the transition to mandated central clearing. SIFMA and its member firms were gratified to see SEC Acting Chairman Uyeda and the Commission extend the implementation date for mandated central clearing of Treasury securities and repurchase agreements. We believe that the SEC will need to address certain technical concerns about several provisions of the rule that could impact the overall scope and disrupt parts of this market.

Wipf’s full testimony can be found here.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.