PRA has issued a policy statement on how it intends to implement a UK leverage ratio framework following the Financial Policy Committee (FPC’s) direction. PRA considers that this framework will address the risk of excessive leverage for the group of firms that are the most systemically important in terms of size and critical services provided to the UK economy, whose individual failure could cause adverse effects on the stability of the UK financial system. The changes apply to PRA-regulated banks and building societies with retail deposits equal to or greater than £50 billion on an individual or a consolidated basis. This statement follows consultation and gives feedback to the nine written responses received (see FReD 17 July). In light of the responses received PRA will extend the transition period for daily averaging disclosure requirements by 12 months. PRA has published its new rules, in three new modules for its Rulebook, with supervisory statements to accompany each one and templates for reporting. (Source: PRA Issues UK Leverage Ratio Framework Policy)