imported>Doug Williamson |
imported>Doug Williamson |
| Line 1: |
Line 1: |
| ''Bank regulation''
| | Standard Setting Body. |
|
| |
|
| (LR).
| |
|
| |
| A requirement under Basel III regulations for regulated institutions to hold a minimum ratio of capital to absolute balance sheet outstandings (plus certain other items).
| |
|
| |
| It is calculated as:
| |
|
| |
| LR = Tier 1 capital / Leverage Ratio Exposure (LRE)
| |
|
| |
|
| |
| The leverage ratio is the long term capital ratio for banks by which their Tier 1 capital should in due course be at least 5% of their assets.
| |
|
| |
| This will generally be that their shareholders funds will be >=5% of their loans although the definitions may be subject to domestic practices.
| |
|
| |
|
| |
| Domestic regulators can set higher ratios and the USA has set higher ratios for eight Systemically Important Financial Institutions (SIFIs) than for non-SIFIs.
| |
|
| |
| This requirement is intended to be implemented progressively by 1 January 2019.
| |
|
| |
|
| |
| The initial minimum Basel III requirement was set at 3%, for periods to the end of 2016.
| |
|
| |
|
| |
| '''Leverage Ratio Exposure'''
| |
|
| |
| The [[Leverage Ratio Exposure]] (LRE) - for the purposes of calculating the Leverage Ratio - includes certain other risk exposures, in addition to on-balance sheet assets.
| |
|
| |
|
| | == See also == |
| | * [[Standard]] |
| | * [[Standard Setting Body]] |
|
| |
|
| == See also ==
| | [[Category:Accounting,_tax_and_regulation]] |
| * [[Basel III]]
| | [[Category:The_business_context]] |
| * [[Countercyclical leverage ratio buffer]]
| | [[Category:Identify_and_assess_risks]] |
| * [[G-SII ALRB]]
| | [[Category:Manage_risks]] |
| * [[Liquidity Coverage Ratio]]
| | [[Category:Risk_frameworks]] |
| * [[Net Stable Funding Ratio]]
| | [[Category:Risk_reporting]] |
| * [[Leverage]]
| |
| * [[Leverage Ratio Exposure]]
| |
| *[[LRT]]
| |
| * [[Off balance sheet risk]]
| |
| *[[Systemically Important Financial Institution]]
| |
| *[[Tier 1]]
| |
