ECB Updates Treatment of Leverage Ratio in Monetary Policy Framework
ECB published amendments to its monetary policy implementation guideline to give effect to the leverage ratio becoming a binding Pillar 1 own-funds requirement, under the Capital Requirements Regulation. As per the amended guideline, automatic measures will be applied in case of breaches of the leverage ratio requirement or in case the information on leverage ratio is incomplete or not available in time. The amended guideline implements a Governing Council decision dated May 06, 2021 and the decision is linked to this prudential requirement becoming binding as of June 28, 2021. The guideline shall take effect on the day of its notification to the national central banks of the member states whose currency is the euro.
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Keywords: Europe, EU, Banking, Monetary Policy, Leverage Ratio, Pillar 1, Own Funds, Regulatory Capital, Basel, CRR, ECB
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