Macroprudential policy and financial stability glossary
All glossary entries
Abbreviations
Banking supervision
ECB
Macroprudential policy and financial stability
Monetary policy
Payments and markets
Statistics
L
-
large exposure
- An institution's exposure to a client or group of connected clients, the value of which is equal to or exceeds 10% of its eligible capital. Limits to large exposures can be implemented in Europe via Article 458 CRR.
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LCBG
- large and complex banking group
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LCR
-
See
liquidity coverage ratio (LCR) -
leverage ratio
- The Basel III leverage ratio is defined as Tier 1 capital divided by the bank’s total exposure, expressed as a percentage. The prudential use of a leverage ratio limit is intended to restrict the build-up of leverage in the banking sector and to strengthen the risk-based requirements by adding a simple, non-risk-based backstop.
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LGD
- loss-given-default
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liquidity coverage ratio (LCR)
- A short-term liquidity requirement which aims to ensure that credit institutions hold sufficient high-quality liquid assets to withstand an acute stress scenario lasting 30 days. It has been implemented in Europe via the Commission Delegated Regulation (EU) 2015/61. The LCR is calculated in accordance with the following formula: liquidity buffer ÷ net liquidity outflows over a 30 calendar-day stress period = liquidity coverage ratio %. Credit institutions must maintain a liquidity coverage ratio of at least 100%.
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loan-to-income (LTI) ratio
- A ratio of the amount borrowed to the total annual income of a borrower.
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loan-to-value (LTV) ratio
- The ratio of the amount borrowed to the appraised value or market value of the underlying collateral, usually taken into consideration in relation to loans for real estate financing.
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LTD
- loan-to-deposit
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LTG
- long-term guarantee
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LTI
- loan-to-income
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LTSF
- loan-to-stable-funding
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LTV
- loan-to-value