What next for the Basel III leverage ratio framework?

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Financial Services analysis: Following the publication of Basel III's leverage ratio framework and disclosure requirements, Peter Green, partner at Morrison & Foerster, analyses the likely impact of the guidance and how it fits in with other developments in the area.

What is the guidance that the Bank for International Settlements (BIS) has put forward?

The Basel Committee has published a revised framework for the leverage ratio which makes an adjustment to the way the ratio (which forms part of the Basel III accord) is calculated. The basic premise of the pro-posed leverage ratio is that tier 1 capital should be at least 3% of total exposures, with exposures calculated on a gross (ie without netting in relation to individual transactions) basis.

Originally published in Lexis PSL Banking & Finance on 1/27/2014.

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Topics:  Basel Committee, Basel III, BIS

Published In: Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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