BaFin and DNB have announced extension of the application of the relief measure on leverage ratio to the smaller banks under their direct supervision until March 31, 2022. This follows the ECB statement dated June 18, 2021, in which ECB confirmed that continued “exceptional circumstances” allow for the extension of the temporary exclusion of certain central bank exposures from the leverage ratio calculation; these exposures include euro-denominated coins and banknotes as well certain deposits held at the central bank in minimum reserve accounts. These institutions will, however, be subject to a partially higher leverage ratio requirement, to offset the exclusion of the central bank reserves they hold under "normal" circumstances, as set out in the Capital Requirements Regulation (CRR). BaFin also published a frequently asked question regarding this temporary exclusion.
Keywords: Europe, Netherlands, Germany, Banking, Leverage Ratio, COVID-19, Basel, CRR Regulatory Capital, ECB, BaFin, DNB
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