FRB, FDIC and OCC Issue Notice of Proposed Rulemaking on the Supplementary Leverage Ratio for G-SIBs

The Federal Reserve Board, the FDIC and the OCC proposed a rule to strengthen the leverage ratio standards for the eight largest, most systematically significant U.S. banking organizations. Under the proposed rule:

• Bank holding companies with more than $700 billion in consolidated total assets or $10 trillion in assets under custody ("covered BHCs") would be required to maintain a tier 1 capital leverage buffer of at least 2 percent above the minimum supplementary leverage ratio requirement of 3 percent, for a total of 5 percent, the failure of which would subject covered BHCs to restrictions on discretionary bonus payments and capital distributions; and
• Insured depository institutions of covered BHCs would be required to meet a 6 percent supplementary leverage ratio to be considered "well capitalized" for prompt corrective action purposes.

See:Complete Rulemaking. See also:Federal Reserve Board Press Release.