Bank for International Settlements: Frequently asked questions on the Basel III leverage ratio framework

07 October 2014

The BCBS has issued FAQs on the Basel III leverage ratio. To promote consistent global implementation of the requirements, the BCBS has agreed to periodically review FAQs and publish answers along with any technical elaboration of the standard and any interpretative guidance that may be necessary.

On January 2014, the Basel Committee on Banking Supervision (“the Committee”) published the Basel III leverage ratio framework together with the public disclosure requirements applicable as of 1 January 2015. To promote consistent global implementation of those requirements, the Committee has agreed to periodically review frequently asked questions (FAQs) and publish answers along with any technical elaboration of the standards text and interpretative guidance that may be necessary.

Since publication, the Committee has received numerous FAQs with respect to the published standards text. This document sets out the first set of FAQs that relate to the Basel III leverage ratio framework.

The questions and answers are grouped according to different relevant areas, which are in the order

• criteria for the recognition of cash variation margin associated with derivative exposures (section 1);
• centrally cleared client derivative exposures (section 2);
• netting of securities financing transactions (SFTs) (section 3);
• the treatment of netting of SFTs and derivatives under a cross-product netting agreement (section 4); and
• the exposure measure under the additional treatment for credit derivatives (section 5).

Full publication

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