Regulatory Alerts2022-01-31
Leverage Requirements Guideline (2023)
The Office of the Superintendent of Financial Institutions (OSFI) issued this guideline to establish a 3% minimum leverage ratio framework for federally regulated banks, bank holding companies, and trust and loan companies. Institutions must calculate the ratio using Tier 1 capital divided by a comprehensive exposure measure that captures on-balance sheet assets, derivatives, securities financing transactions, and off-balance sheet items without netting or collateral deductions. Domestically systemically important banks must additionally maintain a leverage ratio buffer of 50% of their higher-loss absorbency requirements, while OSFI retains supervisory authority to set bilateral authorized ratios and mandate capital increases based on risk profiles and operational oversight.