The Leverage Ratio (LR) is a non-risk based capital requirement which seeks to–
(a) restrict the build-up of excessive levels of leverage in banking institutions to avoid destabilising deleveraging processes that can damage the broader financial system; and
(b) reinforce the risk-based Capital Adequacy Framework with a non-risk-based backstop measure.
This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking
