Sweden could benefit from forcing its banks to comply with higher leverage ratios than under current regulations, according to a ‘staff memo’ published today (May 19) by Sveriges Riksbank.

The researchers, from the Riksbank’s financial stability department, estimate the social cost of raising capital requirements is relatively modest, such that it may be worth doing even if the probability of a crisis only falls marginally. Indeed, earlier studies may have underestimated the cost due to the