On September 3, 2014, the Federal Reserve Board, FDIC, and the OCC adopted a final rule to adjust the definition of the denominator of the supplementary leverage ratio in line with recent changes agreed to by the BCBS. The changes are intended to better reflect a banking organization’s on- and off-balance sheet exposures, and based on estimates, would increase the aggregate measure of exposure across firms.

In addition to modifying the methodology for including off-balance sheet items in the denominator of the supplementary leverage ratio, the final rule also requires institutions to calculate total leverage exposure using daily averages for on-balance sheet items and the average of three month-end calculations for off-balance sheet items. These changes to the supplementary leverage ratio apply to all banking organizations subject to the advanced approaches risk-based capital rule. Certain public disclosures required by the final rule must be made starting in the first quarter of 2015 and the minimum supplementary leverage ratio requirement using the final rule’s denominator calculations is effective January 1, 2018.

The final rule is available at:

https://www.fdic.gov/news/board/2014/2014-09-03_notice_dis_c_fr.pdf.