Leverage Ratio RCAP 2026: Where Six Jurisdictions Depart from Basel

On 13 October 2026 the Basel Committee on Banking Supervision published six Regulatory Consistency Assessment Programme (RCAP) reports on how Australia, Canada, Japan, Korea, Switzerland and the United Kingdom implement its leverage ratio framework. Australia, Japan, Korea and Switzerland were graded compliant, the highest overall grade. Canada and the UK were graded largely compliant, one notch below. The Committee describes the batch as concluding the first round of multi-jurisdictional leverage ratio RCAP assessments, and its RCAP page schedules further batches into 2028.

Each grade measures a jurisdiction’s rules against the Basel text as of 30 June 2026, and the reports go down to the level a reporting team works at: the Basel paragraph, the domestic provision, the template row and the measured effect on sample banks’ exposure measures. Canada’s leverage exposure measure runs derivatives through the unmodified standardised approach for counterparty credit risk (SA-CCR). The UK excludes more central bank claims than Basel allows. Canadian and Australian disclosure rules weaken the daily-average securities financing transaction (SFT) figures that Basel uses to expose quarter-end window dressing.

None of the six grades changes a filing obligation on its own. One report does record changed obligations: Korea’s supervisor amended its leverage ratio rules during the assessment, including new disclosure rows, and those amendments took immediate effect.

Related reading: Basel III Implementation 2027: BCBS Progress Reporting

Leverage ratio RCAP grades for the six jurisdictions

The operative dates, taken from the reports, the media release and the Committee’s RCAP page:

• October 2025: the assessments began, with a self-assessment by the authorities to January 2026, an assessment phase from January to June 2026 and a review phase from July to October 2026 (as set out in the Canadian and UK reports).
• 30 June 2026: the date as of which each jurisdiction’s regulations were assessed.
• 13 October 2026: reports and media release published.
• 1 January 2027: the PRA’s final Basel 3.1 rules introduce a 40% credit conversion factor (CCF) for other commitments not subject to a 10%, 50% or 100% CCF under Article 111, Table A1, of the Credit Risk: Standardised Approach (CRR) Part. Table A1 assigns other factors to specified commitments, including 50% for note issuance and revolving underwriting facilities and for UK residential mortgage commitments not subject to a 10% or 100% factor. A revised APS 110 also commences in Australia.
• Q2 2027: expected publication of leverage ratio reports on China, the European Union, Indonesia and the United States.

Australia and Switzerland each carry a largely compliant component and still receive the top overall grade. Canada and the UK each carry one partially non-compliant component and stop at largely compliant. The RCAP Handbook sets a soft expectation that the overall grade cannot sit more than one notch above the worst component grade, and gives the example that a jurisdiction with one partially non-compliant component cannot receive an overall grade higher than largely compliant.

How the Committee grades a leverage ratio framework

Every report covers the same four components (the G-SIB buffer component is not applicable in Australia and Korea, which have no G-SIBs headquartered there): definitions and application, and calculation; exposure measurement; buffer requirements and transitional arrangements for global systemically important banks (G-SIBs); and disclosure requirements. The Basel chapters behind them are LEV10, LEV20, LEV30, LEV40 and LEV90, plus DIS20 (Template KM1, rows 13 to 14d) and DIS80. The scope covers the revised leverage ratio of December 2017, the June 2019 revision for client cleared derivatives, the G-SIB leverage buffer (met with Tier 1 capital and set at 50% of the G-SIB’s risk-weighted higher loss absorbency requirement) and the 2019 disclosure revisions that require leverage ratios on quarter-end and on daily-average SFT values.

The numerator sits outside the grade. Each report states that the overall grade does not reflect compliance with the Basel definition of capital, which the Committee assessed in earlier risk-based capital RCAPs. Canada, Australia and Switzerland were graded largely compliant on that component in 2013 and 2014, the UK under the 2014 EU assessment, and Korea in 2016; Japan was graded compliant in a 2016 follow-up. A compliant leverage ratio grade therefore says nothing about how Tier 1 capital is defined in that jurisdiction.

Grade and materiality definitions

The Handbook defines the four grades by aggregate impact. Compliant means no deviations, or deviations assessed in aggregate as having no impact on financial stability or the international level playing field. Largely compliant means a limited impact; partially non-compliant a significant impact; non-compliant a severe impact or no adoption. The third grade was renamed in 2025 and was previously called materially non-compliant, so older reports use the old label for the same notch.

Materiality is measured on the RCAP sample banks. For a quantifiable deviation, the Assessment Team calculates the cumulative effect on the reported leverage ratio exposure measure. For potential materiality, the Handbook asks whether there is a reasonable chance a deviation assumes significance within the next three years, and expects assessors to adopt a conservative view where a deviation is potentially material even if it is not material today. Areas where a jurisdiction is stricter than Basel (super-equivalence) cannot offset deviations elsewhere. Observations are presented for context, are considered compliant and have no bearing on the outcome.

The reports also state, as background only, how many sample banks are bound by the leverage ratio. Five of seven Japanese sample banks and five of six Swiss sample banks are leverage-bound; one of five UK sample banks is; none of the Canadian, Australian or Korean sample banks is. Under the Handbook that information affects neither the quantitative assessment nor the overall grade. For the Committee’s separate quantitative impact work, see our note on Basel III monitoring and capital planning.

A compliant grade with open findings is common in this batch. Japan’s compliant grade carries seven not-material findings, and Australia’s carries one potentially material disclosure finding. The reports also did not evaluate the resilience of each banking system or the effectiveness of supervision.

Canada: SA-CCR inside the leverage exposure measure

Canada implements the framework through OSFI’s Leverage Requirements Guideline. The report gives 1 February 2023 as its effective date and says the framework applies to 89 of the 100 banks established in Canada, representing 99.99% of banking sector assets; OSFI’s own guideline page lists the effective date as February 2023 for institutions with an October fiscal year-end and April 2023 for institutions with a December fiscal year-end. The guideline excludes Category III small and medium-sized deposit-taking institutions (SMSBs), which OSFI’s SMSB Capital and Liquidity Requirements Guideline defines. Under its general segmentation criteria, an SMSB with total assets below CAD 10 billion is in Category III when its total loans do not exceed CAD 100 million, its interest-rate and foreign-exchange derivatives have a combined notional amount not exceeding 100% of total capital, it has no other type of derivative exposure and its other off-balance sheet exposures do not exceed 100% of total capital. An SMSB meeting those criteria could instead request Category II in writing before the SMSB guideline took effect (a new SMSB before its order to commence and carry on business), and OSFI may move an institution to a different category notwithstanding the general criteria. Exposure measurement was graded partially non-compliant on two material findings, with five more assessed as not material.

The two material findings

Basel’s LEV30.16 to LEV30.25 set out a version of SA-CCR modified for leverage ratio purposes. Paragraph 37 of the OSFI guideline points instead to OSFI’s implementation of SA-CCR for risk-based capital. The report explains why that may lower the exposure measure: the unmodified version allows broader recognition of collateral in replacement cost and a potential future exposure multiplier below the value of one fixed in the leverage standard. Basel lets replacement cost be reduced only by the cash portion of variation margin, and only where the LEV30.24 conditions treat that cash as a pre-settlement payment. Canadian rules allow a reduction by net variation margin without restricting it to cash, and do not explicitly require the LEV30.24 conditions.

The second material finding concerns written credit derivatives. LEV30.31 requires the effective notional amount in the exposure measure; paragraph 50 of the OSFI guideline lets that amount be reduced by any cash independent amount pledged by a counterparty. Together, the two deviations reduce the exposure measure by 0.89% on average across the six sample banks and by 2.12% for the most affected bank. OSFI’s response describes the single counterparty credit risk framework across leverage and risk-based capital as a deliberate choice made for operational simplicity, and the report does not record any commitment to change it.

Five not-material exposure findings

• LEV30.2 (guideline paragraph 19): Canada prohibits netting of loans and deposits, a narrower term than Basel’s assets and liabilities. OSFI reports that banks do not net assets and liabilities today.
• LEV30.5 (paragraph 34): an “unless otherwise instructed by OSFI” clause on retained securitisation exposures, introduced for crisis flexibility and never activated.
• LEV30.9 (paragraph 27): permitted deductions for accounting valuation adjustments, carried over from the 2014 framework, with no current use on non-derivative exposures.
• LEV30.37 (paragraph 53): open-maturity repos structured to resemble overnight repos may be netted as overnight, reducing the exposure measure by 0.10% on average and 0.24% at most.
• LEV30.54 (paragraph 64): retail commitments count as unconditionally cancellable if cancellation is allowed to the extent consumer protection law permits. OSFI reports no sample bank is restricted in practice.

Disclosure: the missing averages

The potentially material disclosure finding is narrow and specific. OSFI’s Pillar 3 guidelines for D-SIBs and for small and medium-sized deposit-taking institutions (both 2025 versions) omit Basel LR2 rows 28 to 31A, the mean-value rows, because OSFI requires the leverage ratio on a quarter-end basis only. The report treats this as potentially material because market participants cannot assess whether disclosed ratios are flattered around reporting dates. In KM1, row 14b is omitted because the central bank reserves exemption has not been activated in Canada, and rows 14c to 14d because of the quarter-end-only calculation; that KM1 finding was assessed as not material.

The other omissions are aggregations. LR1 rows 6, 7 and 11 are disclosed together under row 8 (“other adjustments”) of OSFI’s template, with row 4 omitted because the reserves discretion is unused. In LR2, row 4 is omitted because securities sold under SFTs stay on the seller’s balance sheet under IFRS, rows 5 and 21 are combined under OSFI’s row 4, and rows 26 to 27 (national minimum and buffers) are left out because the guideline itself publishes them. A team reconciling an OSFI LR2 to the Basel layout, for a group comparison or an investor request, will find every gap already itemised in the report.

Two further items sit outside the grade. A follow-up item from Canada’s 2019 net stable funding ratio RCAP on bankers’ acceptances is now compliant, after OSFI’s November 2024 revision of its Liquidity Adequacy Requirements Guideline, effective 1 April 2025, removed the 35% available stable funding factor following the end of CDOR in June 2024. And the 40% CCF that OSFI’s Capital Adequacy Requirements Guideline (Chapter 6, section 6.5.1.1, paragraph 47) applies to certain undrawn securitisation commitments to client vehicles is recorded as an observation and listed for a future RCAP, because Basel’s 100% CCF comes from CRE40.20(2), outside the leverage RCAP’s scope.

United Kingdom: the central bank claims exclusion and the buffer design

The UK framework combines a Financial Policy Committee (FPC) direction to the PRA, PRA rules, primary legislation and PRA supervisory publications. The core rules sit in two Parts of the PRA Rulebook, the Leverage Ratio (CRR) Part and the Part on leverage ratio capital requirements and buffers, supplemented by the Reporting (CRR) and Disclosure (CRR) Parts and by Supervisory Statement SS45/15. The report notes that some leverage-relevant provisions remain in the assimilated CRR and will be replaced by PRA rules over time, a process covered in our note on the PRA’s restatement of CRR definitions in the PRA Rulebook.

Scope is threshold-based. A binding leverage requirement applies where retail deposits are at least GBP 75 billion or non-UK assets at least GBP 10 billion, each calculated as the arithmetic mean over the three most recent accounting reference dates. The thresholds are tested at solo level for a CRR firm, at consolidated level for a CRR consolidation entity and at sub-consolidated level for a ring-fenced body.

The material finding: Article 429a(A1) and (A2)

LEV30.7 lets a jurisdiction temporarily exempt central bank reserves from the exposure measure in exceptional macroeconomic circumstances. Under Article 429a(A1) and (A2) of the Leverage Ratio (CRR) Part, UK banks may also exclude the two non-reserve categories in the PRA Rulebook Glossary definition of a central bank claim, banknotes and coins and debt claims on the central bank with a maturity of no longer than three months, and the same treatment extends to claims on foreign central banks denominated in that central bank’s national currency. Every excluded claim must be matched by a liability in the same currency with the same or longer maturity.

The PRA’s case is that excluding reserves alone would mechanically raise banks’ exposure measures whenever reserves are swapped into other central bank claims in reserve-draining operations, which could discourage participation and impede monetary policy. The Assessment Team measured the broader scope at 0.78% of the Basel exposure measure on a weighted average basis, with a maximum individual impact of 1.7%, and assessed it as material. The matching conditions, although stricter than Basel, do not count as offsets under the RCAP methodology. In the aggregate figures for the five sample banks at end-June 2025, the leverage ratio was 5.16% including the exemption and 4.54% excluding it.

A separate observation addresses the exemption itself. The UK minimum was recalibrated from 3% to 3.25% on 3 October 2017 to offset the exemption, and the FPC reviews the exemption annually. The report finds that a fixed 25 basis point add-on does not fully neutralise later growth in reserves, but because LEV30.7 defines neither “commensurate” nor the duration of “temporary”, the Assessment Team found it difficult to reach a definite conclusion and left the point as an observation.

Not-material exposure findings

Three further deviations were assessed as not material. Article 429a(1) adds exclusions that LEV30.8 does not contain: certain 0% risk-weighted intragroup exposures with PRA permission, which affect solo and sub-consolidated levels but not the top consolidated level; certain public sector entity deposit exposures, a discretion the PRA has never exercised; and Covid-era state-guaranteed SME loans, which are amortising. Under Article 429f(1), transaction-related contingent items that the UK designates medium/low risk take a 20% CCF through UK CRR Article 111(1)(c), where Basel’s LEV30.51 sets 50%, with a weighted average impact of 0.2% and a maximum of 0.4%. The same article uses maturity-based CCFs for commitments (50% above one year, 20% for one year or less) where LEV30.52 requires 40%; the PRA’s final Basel 3.1 rules introduce a 40% CCF from 1 January 2027 for other commitments not subject to a 10%, 50% or 100% CCF under Article 111, Table A1, replacing the previous maturity-based factors for that category. The report says that, from that date, the existing deviation will be fully removed. The 2027 rules assign different CCFs to specified commitments, so the 40% factor is not a uniform rate for every commitment; the applicable factor for each commitment type sits in Table A1 of Article 111 of the Credit Risk: Standardised Approach (CRR) Part.

Buffers: ALRB, CCLB and a five-day capital plan

Basel’s LEV40.2 sets a single G-SIB leverage buffer at 50% of the G-SIB risk-based buffer, met with Tier 1 capital. The UK uses an additional leverage ratio buffer (ALRB) set at 35% of the applicable risk-based buffer for G-SIBs and D-SIBs, and a countercyclical leverage ratio buffer (CCLB) set at 35% of the bank-specific countercyclical buffer, both met with Common Equity Tier 1 (CET1). As currently set, the UK buffers are more conservative than the Basel buffer for one UK G-SIB in the sample. For the other two, the UK buffer is lower than the Basel buffer, but converting the CET1 buffer to a Tier 1 equivalent using each bank’s CET1-to-Tier 1 ratio puts the effective UK buffer above Basel’s 50%. With a zero countercyclical buffer, the ALRB alone would be less conservative than Basel; the PRA calls that scenario largely theoretical given the FPC’s preference for a positive, cycle-neutral rate, and the report grades the finding potentially material because the outcome depends on the cycle.

The second potentially material finding is procedural. Under LEV40.3, a bank below its leverage buffer faces automatic capital distribution constraints. Under the UK rules, a firm must notify the PRA and submit a capital plan within five business days, and the PRA may then use supervisory powers to restrict distributions. The report accepts the plan and notification route as a backstop but treats the absence of automatic constraints as a competitive advantage for UK banks.

Disclosure and what sits outside the assessment

Disclosure was graded compliant, with one not-material finding on frequency. Under Articles 433a(1)(b)(x) and 433a(2)(a) of the Disclosure (CRR) Part, large institutions that are G-SIBs or listed disclose the leverage ratio templates semi-annually and other large institutions annually, while Articles 433a(4) and 433c(1)(c) require firms subject to the leverage requirement to disclose selected metrics quarterly. Those quarterly metrics include the average leverage ratio both including and excluding central bank claims, the CCLB and, where applicable, the ALRB.

The FPC announced a package of proposed changes to the UK leverage framework on 7 July 2026. The PRA’s response states that the changes had not been consulted on or finalised when the report was completed, and the report lists them as a follow-up item for a later RCAP. Any revised rules would be assessed then. According to the FPC’s record of its 25 September 2026 meeting, published on 30 September 2026, the FPC agreed to proceed with the proposed leverage ratio reforms, which the Bank of England expects to consult on in early 2027. The package had not become binding PRA rules by the date of the assessment report, and any later change would need to be read against the applicable domestic rules and future RCAP work.

Australia, Japan, Korea and Switzerland: compliant, with findings that reach the return

Australia: a numerator change dated 1 January 2027

APRA applies the leverage ratio to authorised deposit-taking institutions (ADIs) approved to use the internal ratings-based approach: the four D-SIBs, Macquarie Bank and ING Bank Australia, six ADIs in total. Smaller standardised ADIs sit in a simplified framework without the leverage ratio or its reporting, unless APRA decides to impose it. The rules are in APS 110 Capital Adequacy, supported by APG 110, with reporting in Reporting Standard ARS 110.0 and disclosure in APS 330.

Read the super-equivalence finding with the version date beside it. The report credits Australia with a CET1 numerator and a 3.25% minimum, and lists APS 110 as revised in December 2025 with changes effective 1 January 2027, reflecting APRA’s decision to phase out Additional Tier 1 capital. APRA’s own site shows that the APS 110 version in force since 1 January 2025 requires an IRB ADI to maintain a minimum leverage ratio of 3.5% calculated on Tier 1 capital, and that the version commencing on 1 January 2027 requires 3.25% with CET1 as the numerator. A leverage ratio return for a 2026 reporting date is still calculated using Tier 1 capital. The revised CET1-based APS 110 commences on 1 January 2027, and APRA expects banks to comply with the updated reporting requirements for the March 2027 quarterly reporting period.

The disclosure component was graded largely compliant. Paragraph 42 of APS 330 Attachment A lets ADIs calculate the average of daily SFT values for KM1 and LR2 as a “best estimate”, provided it is done consistently and prudently with appropriate governance, and some Australian banks use average month-end values. APRA cites consultation feedback, no observed window dressing and low SFT exposures; the Assessment Team graded the allowance potentially material. LR1 disclosure is semi-annual under paragraph 43 while LR2 components are quarterly, which was assessed as not material.

Two exposure findings were not material. APS 110 Attachment D paragraph 2(c) can be read as permitting exclusion of retained securitisation positions, not only the underlying pool; APRA acknowledged the ambiguity, supervisory evidence showed sample banks applied it inconsistently, and APRA has started amendments that take effect after the cut-off (impact 0.04% on average, 0.14% at most). APS 112 paragraph 14(aa) leaves margin lending out of the SFT definition, so drawn amounts are on-balance sheet loans and undrawn amounts take a 40% CCF (0.02% on average, 0.16% at most).

Japan: compliant on all four components

Japan applies the leverage ratio to internationally active banks, including bank holding companies, cooperative financial institutions and final designated parent companies (the report cites Nomura and Daiwa) with one or more foreign branches or subsidiaries. The Pillar 1 rules took effect from 31 March 2019, the G-SIB leverage buffer from end-March 2023 and the revised 2017 framework from end-March 2024. The main instrument is the Leverage Ratio Notice (FSA Notice No. 11 of 2019), with Pillar 3 under FSA Notice No. 7 of 2014 and a Q&A on the Leverage Ratio Notice.

Seven findings were all assessed as not material. The Leverage Ratio Notice sets a minimum but does not state that banks must meet it “at all times” (Article 2(1)); Japanese banks report quarterly, and sample banks’ quarter-end ratios over the past two years ranged from 4.64% to 8.07%. The other findings concern cash pooling, clearing member trade exposures in multi-level client structures, margin lending in the SFT definition, the default condition for SFT netting agreements and the conditions for agent SFTs. On disclosure, Appended Forms No. 10 and No. 6 do not require the KM1 items showing the leverage ratio with and without the temporary exemption of central bank reserves or the mean SFT values; those items are required only in LR2.

The central bank reserves exemption appears only as an observation. Japan excluded reserves as a Covid measure in 2020, ended that treatment on 31 March 2024 and introduced a LEV30.7 exemption from 1 April 2024 with a fixed 15 basis point add-on that set the minimum at 3.15%, calibrated on 2013 balance sheets. As in the UK report, the Assessment Team could not reach a definite conclusion on whether that is commensurate and temporary. For the seven sample banks at end-March 2025, the aggregate leverage ratio was 5.26% with the exemption and 4.23% without it.

Korea: rectifications already in force

Korea’s leverage ratio rules are in Appendix 3-8 of the Detailed Regulation on Supervision of Banking Business (DRSBB), in effect since 26 January 2015, and apply to all Korean banks, internationally active or not. Reporting requirements sit in the Financial Supervisory Service’s prudential reporting framework and instructions. The compliant grade takes into account five rectifications the FSS issued in June 2026, before the 30 June 2026 cut-off, which the report says took immediate effect:

• LEV30.7 (Appendix 3-8, article 6-2): if central bank reserves are exempted, the FSS Governor may propose a higher minimum leverage ratio to the Financial Services Commission. The discretion has never been exercised.
• LEV30.12 (article 9): a condition requiring supervisory assessment of the frequency of cash pooling transfers.
• LEV30.31(4) (article 16): clarified conditions for reducing the effective notional amount of written credit derivatives.
• LEV30.48 (article 22): off-balance sheet exposures after provisions cannot fall below zero.
• DIS20.5 (DRSBB Separate Form No. 120, 26.B.(1)): added rows requiring disclosure of the leverage ratio reflecting the mean value of SFTs.

One not-material finding remains: Korea applies a 20% CCF to unconfirmed standby letters of credit related to particular transactions, against Basel’s 50% under LEV30.51, an impact of 0.14% of sample banks’ exposure measure at 31 December 2025 and 0.57% for the most affected bank. An observation notes that Korea’s LR1 lacks the Basel row instructions.

Switzerland: buffers and reporting frequency

Switzerland implements the final framework through the Capital Adequacy Ordinance and the FINMA Ordinance on the Leverage Ratio and Operational Risks (LROO-FINMA), effective since 1 January 2025, with the credit risk and disclosure ordinances alongside. The leverage ratio applies to all banks at consolidated and entity level; liquid, well-capitalised banks in Categories 4 and 5 may apply for a simplified version under the regime covered in our note on FINMA’s small banks regime.

The only potentially material finding concerns buffers. Under CAO Article 130(3) to (4), a G-SIB must meet its leverage buffer at all times but may run temporary shortfalls after losses and must show how and when it will restore the buffer; FINMA may impose binding corrective measures, including distribution restrictions, if it fails to restore compliance. FINMA’s response calls this a conscious deviation. The Swiss buffer is set at 1.5% plus market share and size surcharges and is met with CET1; the largest Swiss bank’s buffer is 2%, against 0.75% under its current Basel bucket.

A not-material finding on frequency is the one most relevant to Swiss reporting teams. CAO Article 14 requires quarterly leverage ratio calculation at solo level but no universal quarter-end requirement at consolidated level. The Disclosure Ordinance requires Category 1 and 2 banks, and some Category 3 banks, to calculate and disclose the consolidated ratio quarterly, so certain Category 3 to 5 banks do so only semi-annually. In the sample, three Category 3 banks are required to report the consolidated ratio only semi-annually, about 11% of the sample’s total exposure measure; for two of them the solo measure covers 95% and 99% of the consolidated figure, and the third reports the consolidated ratio to FINMA quarterly although it is not required to. A second not-material finding concerns the default event in derivative netting conditions. An observation on capping the maturity factor for margined derivatives at the unmargined factor (LROO-FINMA Article 11(4)) went to the Committee as a request for guidance on LEV30.16.

Four issues that recur across the batch

Daily-average SFT disclosure is the recurring issue in four of the six reports. Basel added the requirement in 2019 to address temporary reductions in transaction volumes around reference dates, and the reports grade any gap through its effect on market participants’ ability to see that behaviour. A quarter-end-only calculation, as in Canada, removes the comparison entirely; a month-end proxy, as some Australian banks use, softens it. Korea closed the gap by rule change. The UK’s quarterly average leverage ratio disclosures sit inside a component graded compliant.

Central bank reserves raise the open question in the batch. The UK and Japan both use fixed add-ons, 25 basis points set in 2017 and 15 basis points calibrated on 2013 balance sheets, and both reports say the same thing: LEV30.7 defines neither “commensurate” nor the trigger or duration of “temporary”, so the Assessment Team could not conclude on the arrangement a compliant exemption would need. None of the six reports says whether or when the Committee will clarify that point.

After publication: follow-up mechanics and the next batch

The Handbook sets out three kinds of follow-up: items listed in a report for future assessment teams, reporting by jurisdictions on steps taken, and interpretive issues referred to the Committee. Reporting to the Secretariat is mandatory only where domestic regulations change. A jurisdiction that amends its rules can ask for its grade to be revised; the Secretariat assesses the new rules and, if the Committee agrees, an updated report is published next to the original. Later assessments re-examine listed items and any rectifications.

In this batch, the listed items are the off-balance sheet securitisation CCFs for Canada, the UK and Australia, plus the FPC package for the UK. Switzerland’s report adds an area for further guidance from the Committee on the maturity factor for margined derivatives. The media release also states that the Committee started jurisdictional assessments of the Basel III revisions to risk-weighted assets in H1 2026 and continues to assess leverage ratio implementation.

The Committee’s RCAP page schedules the next leverage ratio batch, China, the European Union, Indonesia and the United States, for expected publication in Q2 2027, with further batches through Q2 2028. EU institutions report the leverage ratio within the EBA supervisory reporting framework covered in our COREP reporting guide; the EU’s own leverage ratio grade is not yet published.

Frequently Asked Questions

Our group has a UK subsidiary bound by the leverage ratio. Does the UK central bank claims exclusion carry into our home-country consolidated figure?

Each report assesses one jurisdiction’s rules for the entities in its scope, and none discusses cross-border consolidation. The exclusion is a UK rule in Article 429a(A1) and (A2) of the Leverage Ratio (CRR) Part. A consolidated leverage return filed in another jurisdiction follows that jurisdiction’s own exposure measure rules, so the treatment needs to be checked there, not inferred from the UK report.

Korea added mean-SFT disclosure rows in June 2026. From which disclosure period do they apply?

The report says the rectifications were issued before the 30 June 2026 cut-off and took immediate effect. It does not state a first disclosure reference date, so the starting period has to be taken from the FSS’s amended Separate Form No. 120 and its instructions.

Does Canada have to move to the modified SA-CCR now that the finding is material?

Nothing in the report sets a deadline or an obligation. OSFI’s response describes the single counterparty credit risk framework as a deliberate decision. Under the Handbook, if OSFI changes its guideline it reports the change to the Secretariat and may request a revised grade; until then the Leverage Requirements Guideline as written governs Canadian filings.

Does APRA’s best-estimate allowance cover the ARS 110.0 supervisory return, or only public disclosure?

The finding is anchored to APS 330 Attachment A paragraph 42, the public disclosure standard, and to the KM1 and LR2 templates. The report does not assess ARS 110.0 on this point, so the reporting standard itself is the source for how averages are calculated in the supervisory return.

Do the UK’s quarterly average leverage ratio disclosures satisfy the Basel daily-average SFT requirement?

The UK disclosure component was graded compliant, and its only finding concerned the semi-annual or annual frequency of the full templates. The report records the quarterly average leverage ratio, including and excluding central bank claims, as part of the quarterly metrics and raises no averaging finding against the UK.

Why are the UK and Swiss buffer findings graded potentially material instead of material?

In both cases the reports find the current domestic buffers more conservative than Basel’s, so the gap shows up only in scenarios. For the UK, the scenario is a zero countercyclical buffer, under which the ALRB alone is less conservative than Basel’s 50% buffer. For Switzerland, the higher buffer makes the Basel trigger less likely to be breached, and the grading matches the 2016 Swiss G-SIB RCAP on distribution restrictions.

Related Articles

• COREP Reporting Explained: the EU supervisory reporting templates, including leverage.
• PRA CRR Definitions Restatement in the PRA Rulebook: how assimilated CRR text moves into PRA rules.
• FINMA Small Banks Regime: Proportionality: the simplified Swiss regime for liquid, well-capitalised small banks.
• APRA Risk Weight Changes: APS 112 Credit Risk Capital: changes to APRA’s standardised credit risk standard.
• Basel III Implementation 2027: BCBS Progress Reporting: the Committee’s tracking of Basel III adoption across members.

Key Takeaways

• Track the domestic instruments named in each finding (OSFI guideline paragraphs, PRA Rulebook articles, APS 330, DRSBB Appendix 3-8, CAO articles); a grade amends no return.
• Korean disclosure builds need the new mean-SFT leverage ratio rows from Separate Form No. 120; confirm the first reference period with the FSS.
• Australian IRB ADIs switch the leverage numerator from Tier 1 to CET1 and the minimum from 3.5% to 3.25% on 1 January 2027.
• From 1 January 2027, UK filers apply the revised commitment-specific CCFs in the final PRA Basel 3.1 rules, including 40% for other commitments not subject to a 10%, 50% or 100% CCF under Article 111, Table A1; the FPC’s separate leverage-framework reform package remains prospective and amends no existing requirement merely because the FPC has agreed to proceed with it.
• Canadian derivative exposures stay on unmodified SA-CCR, and LR2 mean-value rows stay out of OSFI disclosure, until OSFI amends its guidelines.
• For leverage-bound banks, the Tier 1 requirement is set by the leverage exposure measure, so exposure-measure errors carry straight into the binding capital figure.
• The next leverage ratio RCAP batch, including the EU and the United States, is expected in Q2 2027.

Sources and References

• BIS media release, “Basel Committee finds Australia, Japan, Korea, Switzerland compliant, and Canada, United Kingdom largely compliant with its leverage ratio framework” (13 October 2026): bis.org media release
• BCBS, RCAP: Assessment of the leverage ratio framework, Australia (October 2026): report (PDF)
• BCBS, RCAP: Assessment of the leverage ratio framework, Canada (October 2026): report (PDF)
• BCBS, RCAP: Assessment of the leverage ratio framework, Japan (October 2026): report (PDF)
• BCBS, RCAP: Assessment of the leverage ratio framework, Korea (October 2026): report (PDF)
• BCBS, RCAP: Assessment of the leverage ratio framework, Switzerland (October 2026): report (PDF)
• BCBS, RCAP: Assessment of the leverage ratio framework, United Kingdom (October 2026): report (PDF)
• BCBS, Regulatory Consistency Assessment Programme page, including the RCAP LEV and RWA schedule: bis.org RCAP
• BCBS, RCAP Handbook for jurisdictional assessments (November 2025, published 3 December 2025): publication page
• Basel Framework, LEV30 Exposure measurement: LEV30
• Basel Framework, DIS80 Leverage ratio disclosure requirements: DIS80
• OSFI, Leverage Requirements Guideline (2023): osfi-bsif.gc.ca
• PRA Rulebook, Leverage Ratio (CRR) Part, including Article 429a: prarulebook.co.uk
• APRA, APS 110 Capital Adequacy (version in force from 1 January 2025): apra.gov.au
• APRA, APS 110 Capital Adequacy (version commencing 1 January 2027): apra.gov.au
• FINMA, “FINMA publishes ordinances to implement the final Basel III standards” (27 March 2024), including LROO-FINMA: finma.ch
• OSFI, Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements Guideline (2026): osfi-bsif.gc.ca
• PRA, Policy Statement PS1/26, Implementation of the Basel 3.1 final rules (January 2026; the rules take effect on 1 January 2027): bankofengland.co.uk
• APRA, “Finalising removal of Additional Tier 1 capital” (letter to ADIs, 4 December 2025): apra.gov.au
• Bank of England, Financial Policy Committee Record, September 2026 (meeting of 25 September 2026): bankofengland.co.uk
• PRA Rulebook, Disclosure (CRR) Part, including Articles 433a, 433c and 451: prarulebook.co.uk
• PRA Rulebook, Part on leverage ratio capital requirements and buffers, including the application thresholds, buffer and capital plan rules: prarulebook.co.uk
• PRA Rulebook: CRR Firms: Leverage Ratio Instrument 2024 (PRA2024/6, in force 5 August 2024), including the Glossary definition of central bank claim: prarulebook.co.uk (PDF)
• Domestic instruments cited from the six BCBS reports above, not separately opened for this article: OSFI Capital Adequacy Requirements Guideline, Liquidity Adequacy Requirements Guideline and Pillar 3 guidelines for D-SIBs and SMSBs (Canada); APRA Reporting Standard ARS 110.0, APS 330, APS 112 and APG 110 (Australia); the PRA Reporting (CRR) Part, Supervisory Statement SS45/15 and the assimilated UK CRR, including Article 111 (United Kingdom); FSA Notice No. 11 of 2019, Notice No. 7 of 2014 and the Q&A on the Leverage Ratio Notice (Japan); the Detailed Regulation on Supervision of Banking Business, Appendix 3-8, and DRSBB Separate Form No. 120 (Korea); the Capital Adequacy Ordinance (Switzerland)

Leverage reporting checks before the Q2 2027 RCAP batch

For teams filing in the six assessed jurisdictions, the next fixed dates are domestic: 1 January 2027 for the UK’s revised category-specific commitment CCFs and Australia’s CET1-based APS 110, and the start date the FSS attaches to Korea’s new mean-SFT rows. The useful artifact to produce now is a row-level map from your own leverage return and Pillar 3 templates to the findings tables in the relevant report, with each deviation marked as current rule, pending domestic change or follow-up item, ready to update when OSFI, the PRA or APRA publish on the listed items and when the EU and US reports arrive in Q2 2027.

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