Leverage Ratio: Difference between revisions
imported>Doug Williamson (Add link.) |
(Layout.) |
||
| (6 intermediate revisions by 2 users not shown) | |||
| Line 1: | Line 1: | ||
''Bank regulation'' | ''Bank regulation'' | ||
(LR). | (LR). | ||
| Line 17: | Line 17: | ||
Domestic regulators can set higher ratios and the USA has set higher ratios for eight Systemically Important Financial Institutions (SIFIs) than for non-SIFIs. | Domestic regulators can set higher ratios and the USA has set higher ratios for eight Systemically Important Financial Institutions (SIFIs) than for non-SIFIs. | ||
==Leverage Ratio Exposure== | |||
The [[Leverage Ratio Exposure]] (LRE) - for the purposes of calculating the Leverage Ratio - includes certain other risk exposures, in addition to on-balance sheet assets. | The [[Leverage Ratio Exposure]] (LRE) - for the purposes of calculating the Leverage Ratio - includes certain other risk exposures, in addition to on-balance sheet assets. | ||
| Line 31: | Line 27: | ||
* [[Countercyclical leverage ratio buffer]] | * [[Countercyclical leverage ratio buffer]] | ||
* [[G-SII ALRB]] | * [[G-SII ALRB]] | ||
* [[Leverage]] | * [[Leverage]] | ||
* [[Leverage Ratio Exposure]] | * [[Leverage Ratio Exposure]] | ||
* [[Liquidity Coverage Ratio]] | |||
*[[LRT]] | *[[LRT]] | ||
* [[Net Stable Funding Ratio]] | |||
* [[Off balance sheet risk]] | * [[Off balance sheet risk]] | ||
*[[Supplementary leverage ratio]] (SLR) | |||
*[[Systemically Important Financial Institution]] | *[[Systemically Important Financial Institution]] | ||
*[[Tier 1]] | *[[Tier 1]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:Manage_risks]] | |||
Latest revision as of 02:29, 31 January 2024
Bank regulation
(LR).
A requirement under Basel III regulations for regulated institutions to hold a minimum ratio of capital to absolute balance sheet outstandings (plus certain other items).
It is calculated as:
LR = Tier 1 capital / Leverage Ratio Exposure (LRE)
The leverage ratio is the long term capital ratio for banks by which their Tier 1 capital should in due course be at least 5% of their assets.
This will generally be that their shareholders funds will be >=5% of their loans although the definitions may be subject to domestic practices.
Domestic regulators can set higher ratios and the USA has set higher ratios for eight Systemically Important Financial Institutions (SIFIs) than for non-SIFIs.
Leverage Ratio Exposure
The Leverage Ratio Exposure (LRE) - for the purposes of calculating the Leverage Ratio - includes certain other risk exposures, in addition to on-balance sheet assets.
