CA-10.1.3
The leverage ratio serves as a supplementary measure to the risk-based capital requirements of the rest of this Module. The leverage ratio is a simple, transparent ratio and is intended to achieve the following objectives:
(a) To constrain the build-up of leverage in the banking sector, helping avoid destabilising deleveraging processes which can damage the broader financial system and the economy; and
(b) To reinforce the risk based requirements with a simple, non-risk based "backstop" measure; and
(c) To serve as a broad measure of both the on- and off-balance sheet sources of bank leverage and, thus its risk profile.
Added: October 2018