been designed as a straightforward measure that complements and acts as a floor to the minimum risk - based capital ratio. it aims to provide additional protection against what is known as “ model risk ”, i. e. underestimating the regulatory capital needed further to a calculation using the sophisticated models allowed by basel ii and iii. on the more technical side, there appears to be agreement on the definition and calculation of the ratio, the treatment of derivatives and repos, and operations with ccps. but doubts remain over its final calibration and how it affects certain business models, specifically those most centred on retail activity. the banco de espana has supported the setting of this leverage ratio in pillar 1 on the understanding that it can be a good prudential tool, once correctly calibrated. in this respect, the monitoring period prior to its entry into force will provide information and experience. although european regulations envisage that countries may apply this ratio as they deem fit until its harmonisation in 2018, it is not the intention of the banco de espana, in principle, to bring forward its application. as regards liquidity, basel iii has added new regulatory requirements : a short - term liquidity coverage ratio ( lcr ), and a long - term requirement, the net stable funding ratio ( nsfr ). bis central bankers ’ speeches the short - term liquidity coverage ratio is designed so that banks may have an asset buffer with which to meet their maximum foreseeable liquidity or funding needs over a period of at least 30 days. as what is involved is a safety margin, this ratio might at times of stress be below 100 % of such maximum foreseeable needs, which is the level demanded once the requirements come fully into force. however, if a bank ’ s liquidity - generating capacity stands at below 100 % of the maximum foreseeable needs, it will be obliged to inform the supervisor, with which it will have to agree a plan to regain the 100 % level. the initial design of this ratio is very demanding and, perhaps, not very realistic. the year 2015 was too early a date for its full implementation, and the definition of “ high - quality liquid assets ” or the assumptions of liquidity needs were overly rigorous. hence, in january 2012, the basel committee of central bank governors and heads of supervision revised the accord to widen the base of assets considered highly liquid and to soften the implementation timetable. this regulation is also practically finalised, at

the analysis of the pros and cons is more complex. in this regard, a key problem for a macroprudential policymaker is to decide whether we are in “ normal times ” at a particular time. in this regard, authorities can employ a broad range of indicators, including the creditto - gdp gap and other financial and macroeconomic metrics, such as the output gap. furthermore, it is also necessary to assess the appropriate neutral level of the ccyb in normal times. this may depend on : - the ( cyclical and structural ) characteristics of the domestic economy that can affect the estimated intensity of systemic crises. - the desired level of macroeconomic stabilisation capacity afforded to national macroprudential policies in light of the available buffers in other policy instruments. - the ( cyclical and structural ) characteristics of the banking system, such as the intensity of competition and sectoral composition of assets and liabilities, which can affect the capacity to withstand potential shocks, under both baseline and adverse scenarios. - other factors, such as the degree of domestic and cross - border interconnectedness of the financial system and the overall economy, also carmen bro to and jo rge e. galan. ( 2021 ). “ evidencia so bre el impacto y la efectividad de las herramientas macro prudenciales ”, ice, r evis ta de economia, ( 918 ). these results are co nsistent with previo us empirical estimatio ns studying the impact o f dynamic pro visions during the glo bal financial crisis, which besides the benefits in terms o f pro vision of credit, suggest that a 1 pp increase in capital in go o d times wo uld increase firm emplo yment by 6 pp and the pro bability o f survival o f firms by 1 pp. gabriel jimenez, steven ongena, jo se l. peydro and jesus saurina. ( 2017 ). “ macro prudential po licy, co untercyclical bank capital buffers, and credit supply : evidence fro m the spanish dynamic pro visioning experiments ”. journal of political economy, 125 ( 6 ), pp. 2126 – 2177. need to be considered. these factors have a significant impact on the vulnerability of the economy to internal and external shocks. authorities that have moved to a positive neutral ccyb have used different approach to