Final FPC Direction and Recommendation over the leverage ratio
The FPC directs the PRA to implement the following measures (the ‘leverage measures’) in relation to the following firms (each a ‘relevant firm’):
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each major UK bank, building society or investment firm;
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each UK bank, building society or investment firm with significant non-UK assets; and
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any holding company approved or designated by the PRA whose consolidated situation (including, where that holding company is part of a RFB sub-group, the consolidated situation of that sub-group) is comparable to any other relevant firm.
The leverage measures are to:
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require each relevant firm to hold sufficient Tier 1 capital to satisfy a minimum leverage ratio of 3.25%;
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secure that each relevant firm ordinarily holds sufficient Tier 1 capital to satisfy a countercyclical leverage ratio buffer rate of 35% of its institution-specific countercyclical capital buffer rate, with the countercyclical leverage ratio buffer rat