On November 7, 2014, HM Treasury published a consultation paper seeking views on how to implement the Financial Policy Committee’s (“FPC”) recommendations, which follow from the FPC’s review of the role of the leverage ratio in the capital framework for UK banks and large investment firms. The FPC recommended 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 FPC has stated that the directions should include a minimum leverage ratio requirement, a supplementary leverage ratio buffer to apply to global systemically important banks (“G-SIBs”) and major UK institutions, as well as a countercyclical ratio buffer. HM Treasury’s consultation paper seeks views on how to implement the FPC’s recommendations and grant the FPC such powers of direction. The consultation closes on November 28, 2014.
The consultation paper is available at: