UK:
Bank Of England Publishes Financial Policy Committee’s Review Of Role Of Leverage Ratio
18 November 2014
Shearman & Sterling LLP
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On October 31, 2014, the Financial Policy Committee's
("FPC") review of the role of the leverage ratio in the
capital framework for UK firms was published by the Bank of England
("BoE"). The FPC requests that HM Treasury enables the
FPC to give directions to the Prudential Regulation Authority
("PRA") to set leverage ratio requirements and buffers
for PRA-regulated institutions. The directions should include a
minimum leverage ratio requirement, a supplementary leverage ratio
buffer to apply to global systemically important banks and major UK
institutions, as well as a countercyclical ratio buffer. The BoE
also published a letter from George Osborne, the Chancellor of the
Exchequer, to Mark Carney, the Governor of the BoE, stating that
the government accepts these FPC recommendations, aims to grant the
FPC such powers of direction and will set out proposals to
Parliament to do so.
The review document is available at: http://www.bankofengland.co.uk/financialstability/Documents/fpc/fs_lrr.pdf.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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