ECB updates treatment of leverage ratio in the Eurosystem monetary policy counterparty framework

7 May 2021

Metadata
Provider: 
ECBECB
URL: 
https://www.ecb.europa.eu//press/pr/date/2021/html/ecb.pr210507~ff62148da1.en.htmlhttps://www.ecb.europa.eu//press/pr/date/2021/html/ecb.pr210507~ff62148da1.en.html
Retrieved on: 
Saturday, May 8, 2021
Information
Tags: 
Capital requirement, Finance, Financial ratios, Economy, Money, Capital adequacy ratio, Leverage, Financial capital, European Central Bank, Tier 1 capital, Euro, Monetary policy
Summary
Key Points: 
  • 7 May 2021

    The European Central Bank (ECB) has today published amendments to its monetary policy implementation Guideline[1] to give effect to the leverage ratio becoming a binding Pillar 1 own-funds requirement.

  • The amended guideline implements a decision taken by the Governing Council on 6 May 2021.
  • [2]

    Under the amended Guideline, automatic measures are applied in case of breaches of the leverage ratio requirement or in case the information on the leverage ratio is incomplete or not made available in time.

  • As of 28 June 2021, the treatment of the leverage ratio in the Eurosystem monetary policy counterparty framework will be aligned with that of existing Pillar 1 own-funds requirements, consisting of the common equity tier 1 capital ratio, the tier 1 capital ratio and the total capital ratio.
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