On August 3, 2016, the European Banking Authority (EBA)
published a report on the leverage ratio (LR) requirements
under the Capital Requirements Regulation (CRR).
The EBA report recommends the introduction of a minimum LR
requirement in the EU to mitigate the risk of excessive leverage,
which is in line with the discussions held by the Group of Central
Bank Governors and Heads of Supervision (GHOS) – the
governing body of the Basel Committee on Banking Supervision (BCBS)
– in January 2016.
The analysis suggests that the potential impact of introducing a
LR requirement of 3 percent on the provision of financing by credit
institutions would be relatively moderate, while, overall, it
should lead to more stable credit institutions. Similarly, on the
basis of econometric analysis, it has been estimated that risk
taking should not be strongly affected. The EBA considers that the
introduction of a 3 percent LR should lead to more stable credit
institutions overall and
