As a credible supplementary measure to the risk-based capital requirements, the Basel III Leverage ratio framework was issued under Circular No. 881 dated 9 June 2015. It is computed as the level of a bank’s Tier 1 capital against its total on-book and off-book exposures. The leverage ratio shall not be less than 5 percent. The BSP assesses the calibration as well as the treatment of the components of the leverage ratio during the 2-year monitoring period from 01 January 2015 to 31 December 2016, in view of migrating to a Pillar 1 requirement starting 2017.
Originating Circular of the Basel III Leverage Ratio Framework
Other Amendments to the Framework