This chapter describes the leverage ratio buffer requirements applying to global systemically important banks.

This version has been removed on 27 Mar 2020
Effective as of: 01 Jan 2022 | Last update: 15 Dec 2019
Status: (View changes)
A new version will be effective as of 01 Jan 2023 | View future version

To maintain the relative roles of the risk-based capital and leverage ratio requirements, banks identified as global systemically important banks (G-SIBs) according to SCO40 must also meet a leverage ratio buffer requirement. Consistent with the capital measure required to meet the leverage ratio minimum described in LEV20.4, G-SIBs must meet the leverage ratio buffer with Tier 1 capital.


The leverage ratio buffer will be set at 50% of a G-SIB’s higher loss-absorbency risk-based requirements. For example, a G-SIB subject to a 2% higher loss-absorbency requirement would be subject to a 1% leverage ratio buffer requirement.


The design of the leverage ratio buffer is akin to the capital buffers in the risk-based framework. As such, the leverage ratio buffer will include minimum capital conservation ratios divided in five ranges. Capital distribution constraints will be imposed on a G-SIB which does not meet its leverage ratio buffer requirement.


The capital distribution constraints imposed on G-SIBs will depend on the G-SIB’s Common Equity Tier 1 (CET1) risk-based ratio and its leverage ratio. A G-SIB which meets both its CET1 risk-based capital requirements (defined as a 4.5% minimum requirement, a 2.5% capital conservation buffer, the G-SIB higher loss-absorbency requirement and countercyclical capital buffer if applicable) and its Tier 1 leverage ratio requirement (defined as a 3% leverage ratio minimum requirement and the G-SIB leverage ratio buffer) will not be subject to minimum capital conservation standards. A G-SIB which does not meet one of these requirements will be subject to the associated minimum capital conservation standards. A G-SIB which does not meet both requirements will be subject to the higher minimum capital conservation standard related to its risk-based capital requirement or leverage ratio.


As an example, the table below shows the minimum capital conservation standards for the CET1 risk-based requirements and Tier 1 leverage ratio requirements of a G-SIB in the first bucket of the higher loss-absorbency requirements (ie where a 1% risk-based G-SIB capital buffer applies).

CET1 risk-based ratio

Tier 1 leverage ratio

Minimum capital conservation ratios (expressed as a percentage of earnings)




> 5.375%–6.25%

> 3.125%–3.25%


> 6.25%–7.125%

> 3.25%–3.375%


> 7.125%–8%

> 3.375%–3.50%


> 8.0%

> 3.50%