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The Leverage Ratio - World Bank

NOTE NUMBER 11. PUBLIC POLICY FOR THE PRIVATE SECTOR. DECEMBER 2009. The Leverage Ratio FINANCIAL AND PRIVATE SECTOR DEVELOPMENT VICE PRESIDENCY. Katia D'Hulster A New Binding Limit on Banks Katia D'Hulster E xce ssive le ver a g e b y b a nk s is wid e ly b e lie v e d t o ha v e c o n t r i b u t e d t o (kdhulster@worldbank .org) is a senior financial the glob al f ina nc ia l c r is is . T o a d d r e s s t his , t he int e r na t io n a l sector specialist in the community ha s p r o p o s e d t he a d o p t io n o f a no n- r is k - b a s e d c a p i t a l Financial Systems measure , the l e v e r a g e r a t io , a s a n a d d it io na l p r ud e nt ia l t oo l t o Department of the World Bank. comp le me nt minim um c a p it a l a d e q ua c y r e q uir e m e nt s . I t s a d o p t i o n can re d uce the r is k o f e x c e s s iv e le v e r a g e b uild ing up in in d i v i d u a l This is the 11th in a series of policy briefs on entities and in t he f ina nc ia l s y s t e m a s a who le.

4 on the leverage multiple. The leverage ratio limit could also be expressed as a range with a long-term

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  Ratios, Leverage, Leverage ratio

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