Fed’s Raskin warns of shortcomings in leverage ratio
The leverage ratio is an important part of the Basel III framework but its use may bring about unintended consequences, according to Sarah Bloom Raskin, a member of the board of governors of the Federal Reserve System.
At the Ohio Bankers' Day in Columbus, Ohio, Raskin said that while a capital requirements framework should be finalised quickly, the use of risk-weighting could fail to properly capture the riskiness of assets due to changing risk or misperceptions. The leverage ratio could help
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