BCBS’ revision of leverage ratio disclosure:
EBF response

EBF advisor: Gonzalo Gasos 

Publication date: 14 March 2019

Executive summary

In recent months, supervisors and regulators have become increasingly concerned about potential window-dressing practices. The concern of supervisors is that some banks do not live up to their responsibility to maintain a sufficiently high leverage ratio and only meet the leverage ratio requirement when they have to report to supervisors. Several comments have sparked a debate on the global and European level that prompted the BCBS to launch a consultation with the aim to prevent those practices.

The EBF encourages supervisors to use their powers to enforce this requirement on an entity-specific basis. Furthermore, the EBF deems it important to further analyse and gain a better understanding of the market dynamics that could potentially indicate window-dressing. Those measures are necessary to limit the regulatory impact of those measures on banks that are compliant with the leverage ratio requirements. Moreover, the EBF believes that the final standards of the BCBS should be applied according to the local proportionality rules.

EBF contact:

Gonzalo Gasos, Head of Banking Supervsion, g.gasos@ebf.eu
Lukas Bornemann, Prudential Policy and Supervision, l.bornemann@ebf.eu