Basel III also established for the first time an international minimum leverage ratio which, unlike the traditional U.S. leverage requirement, takes account of off-balance-sheet items. Second, a series of reforms have been targeted at the larger financial firms that are more likely to be of systemic importance.
When fully implemented, these measures will have formed a distinct regulatory and supervisory structure on top of generally applicable prudential regulations and supervisory requirements. The governing principle for this new set of rules is that larger institutions should be subject to more exacting regulatory and supervisory requirements, which should become progressively stricter as the systemic importance of a firm increases.