Leverage Ratio
लिभरेज अनुपात
Also called Tier 1 Leverage Ratio, Basel III Leverage Ratio
Formula
Leverage ratio = Tier 1 capital / Total exposure measure × 100
- Numerator
- Tier 1 capital (capital measure)
- Denominator
- Total exposure measure (on-balance-sheet, SFT, derivative and off-balance-sheet exposures at 100% CCF)
NRB limit: Minimum Tier 1 leverage ratio of 4% (commercial banks), maintained quarterly
NRB Unified Directive 2082, Directive 1, Annex 1.1 (CAF 2015, paras 1.8 and 2.7) · applies from . Limits change with each monetary policy and directive, so check the latest notice before the exam.
A simple, non-risk-based ratio of Tier 1 capital to a bank's total on- and off-balance-sheet exposure. It acts as a backstop to the risk-weighted capital ratio.
What the value tells you
A higher ratio means less balance-sheet leverage and more capital per unit of exposure; a low ratio indicates a bank is highly leveraged regardless of its risk weights.
Explained
Before the 2007-09 crisis many banks built very large balance sheets while still reporting strong risk-based ratios. Basel III added the leverage ratio to limit this.
CAF 2015 para 2.7 (Annex 1.1 of the Unified Directive) sets it for commercial banks:
- Capital measure: Tier 1 capital as defined in the framework; items deducted from capital are also excluded from exposure.
- Exposure measure: on-balance-sheet assets net of specific provisions, securities financing transactions, derivatives, and off-balance-sheet items converted at a uniform 100% credit conversion factor.
- It is maintained and reported quarterly.
The framework's transition table shows a 4% leverage ratio and its migration to Pillar 1. Because it ignores risk weights, it stops banks from holding too little capital against assets that receive low weights.
Example
Tier 1 capital Rs 8 billion and total exposure Rs 160 billion give a leverage ratio of 8 / 160 × 100 = 5%, above the 4% minimum.
In Nepal
Commercial banks report the leverage ratio to NRB in Form No. 9 of the capital adequacy returns.
प्राथमिक पुँजी र बैंकको वासलातभित्र तथा बाहिरको कुल एक्सपोजरबीचको जोखिम भार नलगाइएको सरल अनुपात। यसले जोखिममा आधारित पुँजीकोष अनुपातको पूरकको काम गर्छ।
अनुपातले के देखाउँछ
अनुपात बढी हुनु भनेको कम ऋणभार र प्रति एकाइ एक्सपोजर बढी पुँजी हो; कम अनुपातले जोखिम भार जेसुकै भए पनि बैंक अत्यधिक ऋणभारमा रहेको देखाउँछ।
व्याख्या
२००७–०९ को संकटअघि धेरै बैंकले जोखिममा आधारित अनुपात बलियो देखाउँदै पनि अत्यधिक ठूलो वासलात बनाएका थिए। यसलाई सीमित गर्न बासेल ३ ले लिभरेज अनुपात ल्यायो।
CAF 2015 को बुँदा २.७ ले वाणिज्य बैंकका लागि यसलाई तोकेको छ:
- पुँजी मापन: संरचनाअनुसारको प्राथमिक पुँजी।
- एक्सपोजर मापन: विशिष्ट व्यवस्था घटाएपछिको वासलातभित्रका सम्पत्ति, धितोपत्र वित्तीय कारोबार, डेरिभेटिभ र १०० प्रतिशत कर्जा रूपान्तरण गुणक लगाइएका वासलातबाहिरका कारोबार।
- यो त्रैमासिक रूपमा कायम र प्रतिवेदन गर्नुपर्छ।
जोखिम भारलाई बेवास्ता गर्ने भएकाले कम भार पाउने सम्पत्तिमा अत्यधिक लगानी गरी पुँजी कम राख्ने प्रवृत्ति यसले रोक्छ।
उदाहरण
प्राथमिक पुँजी रु ८ अर्ब र कुल एक्सपोजर रु १६० अर्ब भए लिभरेज अनुपात = ८ / १६० × १०० = ५ प्रतिशत, जुन ४ प्रतिशत न्यूनतमभन्दा माथि छ।
नेपालमा
वाणिज्य बैंकले पुँजी पर्याप्तता विवरणको फाराम नं. ९ मार्फत लिभरेज अनुपात राष्ट्र बैंकमा पठाउँछन्।
Related
Sources
- NRB Unified Directive 2082 (A, B and C class), Annex 1.1 Capital Adequacy Framework 2015Nepal Rastra Bank
- BCBS: Basel III international regulatory framework for banksArticle
Updated