Bank leverage cut nothing to fear, according to BoE’s David Miles

28 Jul 2011

The Basel Committee and the European Union might have closed in on agreement over bank capital rules but a Bank of England interest-rate setting official this week turned the pressure back on with a speech refuting claims that a halving of bank leverage would dampen credit creation.

David Miles, an external member of the monetary policy committee, called for banks to use "much more" equity and emphasised the importance of the leverage ratio rather than the core tier one favoured by the Basel Committee.

Critics of higher capital ratios have argued that reducing bank leverage ...

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