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The Basel Committee on Banking Supervision has published today its Revised Basel III Leverage Ratio Framework and Disclosure Requirements for consultation. As well as strengthening the regulatory capital base and enhancing risk coverage, the Basel III reforms introduced a leverage ratio into the regulatory framework. The leverage ratio was designed to serve as an important backstop to the risk-based capital measures by constraining the build-up of leverage in the banking system and providing an extra layer of protection against model risk and measurement error. Since the Basel III reforms were announced, the Committee has been working to formulate a leverage ratio requirement that is not only robust, but also internationally consistent given the underlying differences in national...
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