Regulatory Alerts2022-05-17
Financial Policy Memorandum: Leverage Ratio and Countercyclical Capital Buffer Requirements
The Reserve Bank's Financial Policy division recommends to the Financial Stability Committee that no leverage ratio requirements be adopted, citing low benefits and strong opposition from banks regarding compliance costs. The memorandum also outlines feedback on the proposed 1.5% Countercyclical Capital Buffer, noting submitter support for its inclusion but concerns regarding its early-set calibration and operational complexity. Consequently, the division proposes maintaining the status quo for leverage ratios while considering a potential restructuring of the Countercyclical Capital Buffer to address expert doubts about its effectiveness.
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