Leverage Ratio and its Potential For Enhancing the Effectiveness of Capital Regulation

Artikel

The article deals with the procyclical development of risk weights and hence the risk-weighted capital ratio. The leverage ratio should be included in the regulatory reform package (CRR2) as a (non-risk-weighted) prudential backstop. The article defines the complementary relationship of capital and leverage by describing their different responses to the cyclical development associated with the change in the quality of assets in the various phases of the financial cycle. The results of the panel regression on a sample of selected countries illustrate: (i) that the banking sectors with lower capital adequacy relatively more increased the capital ratio in the period of financial stress and more often changed the structure of the assets into less risky assets for the improvement of the capital ratio, with a negative impact on profit; (ii) significantly lower pro-cyclicality of the leverage ratio than the capital ratio.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Journal of Central Banking Theory and Practice ; ISSN: 2336-9205 ; Volume: 8 ; Year: 2019 ; Issue: 2 ; Pages: 129-146 ; Warsaw: De Gruyter Open

Klassifikation und Themen

• Klassifikation: Wirtschaft ; General Financial Markets: Government Policy and Regulation ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: macroprudential policy ; leverage ratio ; capital requirements

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Pfeifer, Lukáš ; Pikhart, Zdeněk
• Ereignis: Veröffentlichung
• (wer): De Gruyter Open
• (wo): Warsaw
• (wann): 2019

Weitere Informationen

• DOI: doi:10.2478/jcbtp-2019-0017
• Handle: http://hdl.handle.net/10419/217678
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ