BCBS Publishes Consultative Document on Leverage Ratio Treatment of Client Cleared Derivatives

October 18th 2018

The Basel Committee on Banking Supervision (BCBS) has published a consultative document on Leverage ratio treatment of client cleared derivatives. The introduction of a leverage ratio requirement is a key element of the Basel Committee’s post-crisis Basel III reforms, and complements the risk-based requirements by providing a safeguard against unsustainable levels of leverage.

As part of the finalised Basel III reforms published in December 2017, the Committee noted that it would conduct a review of the leverage ratio’s impact on banks’ provision of derivatives client clearing services and any consequent impact on the resilience of central counterparty clearing.

Further details can be found in the full press release here.