[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-155897-105":59,"doc-detail-155897-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","are-leverage-ratios-the-panacea-patricia-jackson-july-2018","Are leverage ratios the panacea - Patricia Jackson July 2018","","Explores whether leverage ratios can serve as a reliable “panacea” for measuring and managing bank risk compared with risk-based capital requirements. Reviews research suggesting leverage ratio targets and explains challenges in drawing conclusions, including differences in data composition and regulatory regimes. Discusses alternative empirical tests beyond 2007/2008 survival, evaluates costs and benefits of increasing leverage ratios, and highlights potential distortions in banking activity. Concludes that full effects depend on banks’ reorganization and transition.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/are-leverage-ratios-the-panacea-patricia-jackson-july-2018/155897/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/are-leverage-ratios-the-panacea-patricia-jackson-july-2018/155897.png","ImageObject",300,407,{"name":92,"@type":93},"Patrick","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-08-28",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",16,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What is the central question about leverage ratios in this presentation?","Question",{"text":113,"@type":114},"Whether leverage ratios can act as a comprehensive measure and backstop for bank risk, potentially replacing or improving upon risk-based capital requirements.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"Why is it difficult to draw conclusions when comparing risk-based requirements with leverage?",{"text":118,"@type":114},"Because different studies rely on regimes, comparability assumptions, and sample composition (e.g., broker dealers, large vs small banks, and US vs EU timing) that can bias results.",{"name":120,"@type":111,"acceptedAnswer":121},"What alternative methods are suggested beyond using survival in the 2007/2008 crisis?",{"text":122,"@type":114},"Simulated-crisis approaches using EBA stress test outcomes and balance-sheet clean-up, and market-based default risk measures such as CDS spreads combined with selected financial variables.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},155897,1787940736,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":140,"language":141,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":67,"update_tm":130,"read_time":145,"preview_page_count":4},549758146520,"https://ap-avatar.wpscdn.com/avatar/80002397d8c0411e94?_k=1775819394049821470","Are leverage ratios the panacea?  \nPatricia Jackson July 2018  \n1 January 2014 Presentation title  \nFollowing the different papers on bank risk asset ratios v the leverage ratio – the belief is that leverage ratios should be higher and also that the leverage is a more important and comparable measure of bank risk  \n• Barth et al 2017 suggest the leverage ratio should be increased from 4% to 14% moving away from risk based requirements.  \n• Important that the difficulties in assessing the leverage ratio v risk based requirements are understood  \n• Pros and cons of different methods of research  \n• And the pros and cons of risk insensitive requirements are fully understood .  \n1 January 2014 Presentation title  \nExamples of papers to date  \n\n| Author | Time period | Basel ratio tested | Findings |\n| --- | --- | --- | --- |\n| Estrella et al-2000 | US-1988-1992 All insured banks | Basel I v leverage | Both related to later failure |\n| Demirguc-Kant et al 2010 | Q! 2005-Q12009 | Basel I v leverage | Basel ratio related to later stock market returns |\n| Haldane 2012 | 116 large global banks End 2006 -including broker dealers | Basel 1 v leverage | Leverage not Basel I related to subsequent failure |\n| Blundell –Wignall et al 2013 | 94 US and EU global banks and broker dealers-2004-2011 | Basel I and Basel II | Leverage ratio more predictive of distance to default |\n| Åikman et al 2014 | 116 banks -end 2006 | Basel I | Leverage ratio outperformed in predicting failure except for US banks (which were under a leverage ratio) |\n\n1 January 2014 Presentation title  \nIssues with drawing conclusions re risk based requirements v leverage  \n• Using capital ratios pre crisis as a predictor of failure in the crisis doesn’t work as a test of risk based requirements v leverage. Basel I in force until 2008 was a quasi leverage ratio.  \n• The Basel ratio (Tier1/RWAs) cannot be used without adjusting for introduction of hybrids  \n• The impact of securities activity –broker dealers under different regimeand large bank securities players needs to be considered –Haldane and Blundell Wignall include broker dealers. Haldane’s results are dominated by the effects of the large securities players-does highlight backstop benefits of leverage ratio.  \n• Relying on samples dominated by small banks may severely affect the result –small bank dynamics are different  \n• Relying on US samples distorts the results – US didn’t introduce Basel II  \n1 January 2014 Presentation title  \nCan other tests be utilised rather than survival in 2007/8 crisis  \n• The crisis stressed banks balance sheets and exposures with consequences for P&L and capital  \n• If one could simulate a crisis and look at effects on bank survival….  \n• Taking the 2014 EBA stress test on EU banks combined with the AQR exercise of cleaning up the balance sheets as a simulated crisis, with failure being a fail against the stress test, for 104 banks the Core Tier1 ratio was significant at 1% level, leverage was not significant.  \n• Alternatively using spreads on 5 year CDS for panel of 30 global banks (but excluding US banks) as the measure of default risk in the period 2008 to 2015 (using the yield on 10 year Greek government bonds as the measure of the crisis) the lagged Tier1 ratio was significant at 5% level.  \n• CDS spread in Q2 f Tier1,leverage, loan loss reserve/gross loans, ROE, Greek sovereign Yield average in Q1 –financials all for end of previous year  \n1 January 2014 Presentation title  \nCosts versus benefits of increasing the leverage ratio  \n• The benefits have been estimated in a number of studies by considering the costs of banking crises – although Barth shows this is highly dependent on whether effects on GDP are permanent or temporary  \n• The costs in Miles et al are calculated assuming Modigliani Miller holds although Barth can find no relationship between estimated bank betas and book leverage. And currently there is no evidence investors are accepting lower ROEs.  \n• The distortiona","cbCairBsfOwlv5Kf","https://ap.wps.com/l/cbCairBsfOwlv5Kf","pdf",717540,13,"English","# Are leverage ratios the panacea?\n## Evidence from papers to date\n## Issues comparing risk-based requirements vs leverage\n## Alternative tests beyond the survival outcome\n## Costs versus benefits of increasing leverage ratios\n## Potential distortionary effects\n## Transition and longer-run implications","[{\"question\":\"What is the central question about leverage ratios in this presentation?\",\"answer\":\"Whether leverage ratios can act as a comprehensive measure and backstop for bank risk, potentially replacing or improving upon risk-based capital requirements.\"},{\"question\":\"Why is it difficult to draw conclusions when comparing risk-based requirements with leverage?\",\"answer\":\"Because different studies rely on regimes, comparability assumptions, and sample composition (e.g., broker dealers, large vs small banks, and US vs EU timing) that can bias results.\"},{\"question\":\"What alternative methods are suggested beyond using survival in the 2007/2008 crisis?\",\"answer\":\"Simulated-crisis approaches using EBA stress test outcomes and balance-sheet clean-up, and market-based default risk measures such as CDS spreads combined with selected financial variables.\"}]","Are leverage ratios the panacea - Patricia Jackson July 2018 | PDF",33]