BCBS consults on leverage ratio, castigates bank ‘window dressing’

Collateral pressure margin squeeze leverage ratio cash adobe stock AS 230x150
By Costas Mourselas
18 Oct 2018

The Basel Committee for Banking Supervision (BCBS) on Thursday launched a consultation to address a quirk of Basel capital rules reviled by many derivatives clearers.

The body also warned banks to not temporarily reduce transaction volume during specific dates to fool regulators about their leverage ratio calculations, a practice the BCBS called “window dressing”. The organisation did not name any banks as it warned on this “potential regulatory arbitrage”. 

The leverage ratio is a ...

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