On October 31, 2014, the Financial Policy Committee's (“FPC”) review of the role of the leverage ratio in the capital framework for UK firms was published by the Bank of England (“BoE”). The FPC requests that HM Treasury enables the FPC to give directions to the Prudential Regulation Authority (“PRA”) to set leverage ratio requirements and buffers for PRA-regulated institutions. The directions should include a minimum leverage ratio requirement, a supplementary leverage ratio buffer to apply to global systemically important banks and major UK institutions, as well as a countercyclical ratio buffer. The BoE also published a letter from George Osborne, the Chancellor of the Exchequer, to Mark Carney, the Governor of the BoE, stating that the government accepts these FPC recommendations, aims to grant the FPC such powers of direction and will set out proposals to Parliament to do so.

The review document is available at: http://www.bankofengland.co.uk/financialstability/Documents/fpc/fs_lrr.pdf.