By Huw Jones

LONDON, Dec 6 (Reuters) - Restrictions on risk-taking at banks could be toughened without harming the economy to reduce the chance of a systemic crisis at big lenders, according to a paper published by the Bank for International Settlements (BIS) on Sunday.

BIS, the bank for central banks, published the paper in its Quarterly Review, bolstering the hawks' case for a much higher global leverage ratio just as Basel enters final negotiations.

Global regulators have agreed to impose a so-called binding leverage ratio on banks from January 2018 as an extra safeguard.

The ratio is a measure of capital to a bank's assets on a non-risk weighted basis as a cross check to a lender's core capital buffers, which are risk-related.

The ratio aims to counter any attempts by banks to flatter their risk-weightings in a bid to reduce the amount of core capital needed.

The Basel Committee of banking supervisors from nearly 30 countries set an interim leverage ratio of 3 percent and next year it will decide on the final level.

Regulators in Britain, the United States and Switzerland are already setting out requirements for domestic lenders to have a leverage ratio of 4 percent or more.

The paper said there was considerable room to raise the ratio above its original 3 percent 'test' level, to within a range of about 4 to 5 percent.

"Doing so should help to constrain banks' risk-taking earlier during financial booms, providing a consistent and more effective backstop to the risk-weighted requirements," it said.

This would be particularly true for the 30 global banks, like Goldman Sachs, Deutsche Bank and HSBC, which have been designated by global regulators as systemically important and thus subject to tougher requirements, the paper added.

The Basel Committee's final leverage ratio is likely to need to take into account of a variety of factors, and a ratio higher than 3 percent would be consistent with the tougher core capital levels also required of lenders, the paper said.

(Reporting by Huw Jones; Editing by Elaine Hardcastle)