The BCBS launched a consultation (to run until 13 March 2019) on its revisions to leverage ratio (LR) disclosure requirements. Currently, banks must report the LR at quarter’s end or report a measure based on averaging, for example, using an average of exposure amounts based on daily or month-end values. The current consultative document seeks stakeholders’ views on to add disclosure requirements of the LR exposure measures of securities financing transactions, derivatives replacement cost and central bank reserves calculated using daily averages over the reporting quarter. In this way, the BCBS aims to avert regulatory arbitrage by banks in the form of ‘window-dressing’, in which temporary reductions of transaction volumes in key financial markets around reference dates result in the reporting and public disclosure of elevated LRs.

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