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Leverage

Leverage latest publications

February 4, 2020

U.S. | The rise of collateralized loan obligations: role, structure and risks

Nonfinancial business debt has increasingly come to the attention of economists working in the spheres of policy and finance. The main reason is the relatively high ratio of business leverage, and is recognized as a potential source of financial instability.

December 23, 2019

Business and credit cycles, financial instability and recession triggers

The paper presents a quasi-historiographical or “narrative” analysis of the most critical developments occurring prior to and through the last nine recessions in light of Minsky’s theory of financial instability.

September 19, 2019

Banking Outlook. September 2019

The net profit of the system in the 1Q'19 was EUR 3.2 Bn. The key factors were weak revenues, cost control, and lower provisions. Deleveraging has continued, although since the end of 2018 there has been a slight upturn in total lending. The NPL ratio continues to fall and profitability has improved compared to 1Q'18.

May 18, 2016

Setting a limit to leverage in banking

The global leverage ratio framework is to be finalized in 2016, in order to be implemented in 2018, and will help preventing excessive indebtedness in the banking sector to promote financial stability. Banks will have to consider both risk-sensitive and non-risk-sensitive minimum capital requirements when making decisions

May 29, 2015

Financial Regulation Outlook. May 2015

This month we focus on: Basel updates progress in Basel III implementation, Europe's Bank Structural Reform, endorsing macroprudential policies, Capital Markets Union, the first six months of European banking supervision, the new resolution tools and liquidity provision and a Digital Single Market strategy for Europe.

October 16, 2014

EU adopts a leverage ratio definition ‘largely’ aligned with Basel standards

The European Commission has adopted, on October 10, a delegated regulation that amends CRR with regards to the leverage ratio definition. It incorporates the necessary changes to largely align it with Basel revised standards.

September 8, 2014

US adopts a leverage ratio definition aligned with Basel standards

A harmonized disclosure of the leverage ratio for international banks in 2015 is closer, as US agencies have issued a final rule aligned with Basel revised definition. Europe is pending a Commission delegated act, expected shortly, that will determine if full alignment with global recommendations is achieved.