BitMEX co-founder Arthur Hayes argues that the April 1st overhaul of the Enhanced Supplemental Leverage Ratio is the most consequential US banking reform in years. By relaxing capital requirements, the rule change lets the largest banks expand their balance sheets — absorbing more Treasuries, extending more loans, and effectively creating what Hayes estimates could be high-single-digit trillions in new credit over the coming years.
Hayes ties the credit impulse directly to America's wartime industrial build-up: defence contracting, drone manufacturing, and nuclear infrastructure all require long-duration financing that the government alone cannot supply. With the banking system now freer to lend, he expects that wave of credit creation to dwarf near-term AI-driven deflationary pressures.
On the Fed side, Hayes is sceptical of balance-sheet reduction materialising quickly — the Fed's…
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