Regulatory Alerts2021-01-01
Instructions No. 24 of 2021 Regarding the Application of the Leverage Ratio
The Palestine Monetary Authority issued Instructions No. 24 of 2021 to mandate a minimum 4% Leverage Ratio for all licensed banks, calculated as net Tier 1 capital divided by total on- and off-balance sheet exposures without risk weighting. The directive requires banks to compute this ratio quarterly at both solo and consolidated levels, applying standardized credit conversion factors for off-balance sheet items and specific valuation methods for derivatives and securities financing transactions. Effective March 31, 2022, institutions must implement the calculation framework and begin quarterly reporting and public disclosure of the ratio alongside audited financial statements.
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