Monthly Archives: November 2016

Leverage ratio and repo activity

In the previous post, I briefly mentioned some of the potential issues of the leverage ratio (LR). To be fair, these are only issues to the extent that the regulators did not foresee and did not include these consequences in … Continue reading

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The unintended consequences of the leverage ratio

The leverage ratio is one of the main innovations in the new banking regulatory framework, Basel III. It imposes a minimum amount of Tier 1 capital that depends on the size of the balance sheet, without any consideration for the … Continue reading

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