Regulatory Alerts2023-09-21
Central Bank of Libya Circular 18/2023: Supervisory Instructions for Calculating the Leverage Ratio
The Central Bank of Libya issued Circular 18/2023 to mandate a minimum leverage ratio of 3% for all operating banks, calculated as Tier 1 Capital (after deductions) divided by total on- and off-balance sheet exposures. The instructions require banks to apply standardized conversion factors for off-balance sheet items, exclude specific intangible assets and unrealized losses from Tier 1 capital, and disclose the calculated ratio alongside its numerator and denominator components in financial reports. Compliance is mandatory alongside existing Basel III capital adequacy rules, with the minimum threshold scaling between 3% and 5% based on each bank's systemic importance, size, market share, and deposit volume.
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