BCBS Issues FAQs on Basel III Leverage Ratio Framework | Practical Law

BCBS Issues FAQs on Basel III Leverage Ratio Framework | Practical Law

The Basel Committee on Banking Supervision (BCBS) has issued frequently asked questions (FAQs) on the Basel III leverage ratio framework.

BCBS Issues FAQs on Basel III Leverage Ratio Framework

Practical Law Legal Update 2-584-1566 (Approx. 2 pages)

BCBS Issues FAQs on Basel III Leverage Ratio Framework

by Practical Law Finance
Published on 07 Oct 2014 • International
The Basel Committee on Banking Supervision (BCBS) has issued frequently asked questions (FAQs) on the Basel III leverage ratio framework.
On October 7, 2014, the Basel Committee on Banking Supervision (BCBS) issued frequently asked questions (FAQs) on the Basel III leverage ratio framework (BCBS293).
The full text of the Basel III leverage ratio framework (BCBS270) was published in January 2014 (see Legal update, BCBS finalises leverage ratio and LCR disclosure requirements and consults on NSFR). Since then, the BCBS has received numerous questions relating to the published text. The questions and answers in the FAQs are grouped according to the following areas:
  • Criteria for the recognition of cash variation margin associated with derivatives exposures.
  • Centrally cleared client derivative exposures.
  • Netting of securities financing transactions (SFTs).
  • The treatment of netting of SFTs and derivatives under a cross-product netting agreement.
  • The exposure measure under the additional treatment for credit derivatives.
To promote consistent global implementation of the requirements, the BCBS has agreed to periodically review the FAQs and publish new answers to frequently asked questions, along with any technical elaboration of the standard and any interpretative guidance that may be necessary.
For information on the Basel III leverage ratio framework, see Practice note, Basel III: overview: Leverage ratio.