In its review of the leverage ratio [Bank of England (2014a).], the FPC set out how it expects to calibrate the components of its proposed leverage ratio framework.
The FPC judges that together the proposed leverage ratio framework and calibration will lead to prudent and efficient leverage ratio requirements for the UK financial system. In reaching its view on the proposed calibration, the FPC assumed that it would be able to set a specific buffer to recognise the higher risk to the economy posed by systemic banks, and at certain times in the credit cycle, through the application of supplementary and countercyclical leverage ratio buffers, respectively.
The FPC will review its Directions at least every twelve months in accordance with its statutory obligations. The purpose of these reviews is to determine whether the Direction ought to be revoked and the FPC will consider how risks have evolved against, among other things, its indicators and the initial impact assessment. Furthermore,
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