The PRA is reviewing the leverage ratio requirement thresholds and is offering a modification by consent, where certain conditions are met, to disapply the relevant part of the PRA Rulebook until the review is complete
The leverage ratio is an indicator of a firm’s solvency that relates its capital resources to its exposures. Rule 1.1 of the Leverage Ratio - Capital Requirements and Buffers Part requires firms with more than £50bn retail deposits or £10 non-UK assets (the leverage ratio requirement thresholds) to meet a minimum leverage ratio of 3.25% plus buffers at all times.
In policy statement PS 21/21 - The UK leverage ratio framework, the PRA said it would keep the leverage ratio requirement thresholds under review to ensure they remain consistent with the Bank of England’s concurrent stress testing framework. The Financial Policy Committee announced in 2023 that this framework, including the coverage of banks subject to concurrent stress testing, is currently being revi
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