In the lead-up to the crisis, many banks reported very strong Tier 1 risk-based ratios while, at the same time, managed to build up high levels of on- and off-balance sheet leverage. The use of a supplementary leverage ratio will help contain the build-up of excessive leverage in the system.
It will also serve as an  2  BIS Review 154/2010  additional safeguard against attempts to “game” the risk-based requirements and will help address model risk.