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Advanced Search About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities Board of Governors of the Federal Reserve System The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. Home > News & Events > Press Releases Joint Press Release April 08, 2014 Agencies adopt enhanced supplementary leverage ratio final rule and issue supplementary leverage ratio notice of proposed rulemaking Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency For immediate release Share The Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) on Tuesday adopted a final rule to strengthen the leverage ratio standards for the largest, most interconnected U.S. banking organizations. The final rule applies to U.S. top-tier bank holding companies with more than $700 billion in consolidated total assets or more than $10 trillion in assets under custody (covered BHCs) and their insured depository institution (IDI) subsidiaries. Covered BHCs must maintain a leverage buffer greater than 2 percentage points above the minimum supplementary leverage ratio requirement of 3 percent, for a total of more than 5 percent, to avoid restrictions on capital distributions and discretionary bonus payments. IDI subsidiaries of covered BHCs must maintain at least a 6 percent supplementary leverage ratio to be considered "well capitalized" under the agencies' prompt corrective action framework. The final rule, which has an effective date of January 1, 2018, currently applies to eight large U.S. banking organizations that meet the size thresholds and their IDI subsidiaries. The final rule is substantively the same as the rule proposed by the banking agencies in July 2013. As noted in the final rule, maintenance of a strong base of capital among the largest, most interconnected U.S. banking organizations is particularly important because capital shortfalls at these institutions have the potential to result in significant adverse economic consequences and to contribute to systemic distress on both a domestic and an international scale. Higher capital standards for these institutions place additional private capital at risk before the federal deposit insurance fund and the federal government's resolution mechanisms would be called upon, and reduce the likelihood of economic disruptions caused by problems at these institutions. The banking agencies on Tuesday also issued a notice of proposed rulemaking (NPR) that would modify the denominator calculation for the supplementary leverage ratio in a manner consistent with recent changes agreed to by the Basel Committee on Banking Supervision. The revisions in the NPR would apply to all internationally active banking organizations, including those subject to the enhanced supplementary leverage ratio final rule. The agencies believe the denominator changes in the NPR would more appropriately measure leverage capital requirements and would, in aggregate, increase the requirements across these institutions. The agencies also issued a separate NPR proposing a technical correction to the definition of "eligible guarantee" in the agencies' riskbased capital rules. Comments on both NPRs will be welcomed through June 13, 2014. In a separate action, the FDIC Board also adopted as final its Basel III interim final rule, which is substantively identical to the final rules adopted by the Federal Reserve Board and the OCC in July 2013. Regulatory Capital Rules: Regulatory Capital, Enhanced Supplementary Leverage Ratio Standards for Certain Bank Holding Companies and their Subsidiary Insured Depository Institutions HTML | PDF Regulatory Capital Rules: Regulatory Capital, Proposed Revisions to the Supplementary Leverage Ratio HTML | PDF Regulatory Capital Rules: Advanced Approaches Risk-Based Capital Rule, Proposed Revisions to the Definition of Eligible Guarantee HTML | PDF Board Votes Related Information Meeting Memoranda Open Board Meeting on April 8, 2014 Media Contacts: Media Contacts: Federal Reserve Board Barbara Hagenbaugh OCC Bryan Hubbard FDIC Andrew Gray 202-4522955 202-6496870 202-8987192 Last Update: April 08, 2014 BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities Financial Stability TOOLS AND INFORMATION STAY CONNECTED Contact Publications Freedom of Information (FOIA) Office of Inspector General Budget & Performance | Audit No FEAR Act Español Website Policies | Privacy Program Accessibility BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM 20th Street and Constitution Avenue N.W., Washington, DC 20551