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Feb 04, 2014

Basel III Framework: The Leverage Ratio

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Reducing excess “leverage” in the banking sector is a key component of the Basel III capital standards. “Leverage” for these purposes means the ratio between a bank’s non-risk-weighted assets and its capital. The ratio is intended to be a hard backstop against the risk-based capital requirements and is also designed to constrain excess leverage, which was common amongst many banks pre-crisis. Banks will be required to hold Tier 1 capital of at least 3% of their non-risk weighted assets but some of the stricter elements of the 2013 proposal have been relaxed.

View full memo, Basel III Framework: The Leverage Ratio

Authors and Contributors

Barnabas Reynolds

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5528

+44 20 7655 5528

London

Thomas Donegan

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5566

+44 20 7655 5566

London

Bradley K. Sabel

Of Counsel

Financial Institutions Advisory & Financial Regulatory

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+1 212 848 8410

New York

Winfried M. Carli

Partner

Finance

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+49 69 9711 1000

Frankfurt

Tobia Croff

Partner

Capital Markets

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+39 02 0064 1509

Milan

Hervé Letréguilly

Partner

Capital Markets

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+33 1 53 89 71 30

Paris

Colin Law

Partner

Capital Markets

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+852 2978 8090

Hong Kong

Kolja Stehl

Counsel

Financial Institutions Advisory & Financial Regulatory

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+44 20 7655 5864

London

Ellerina Teo

Senior Associate

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5070

+44 20 7655 5070

London