Composition of P2R-LR
330.
Competent authorities should add the P2R-LR to the minimum leverage ratio Tier 1 requirement. In order to meet this additional requirement, institutions should also be able to use any Tier 1 capital.
331.
Where necessary, and having regard to the institutions’ specific circumstances, competent authorities may decide to require institutions to cover P2R-LR with a higher quality of capital than that specified in the previous paragraph. This decision should be clearly justified, highlighting the specific circumstances that led to it, taking into account the individual risk situation of the institution and considering situations where materialisation of the risk of excessive leverage may require a higher quality of capital to cover potential losses.