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Focusing on averages and leverage...
Reports are out that the BOE's bank regulatory arm is seeking to adjust its method of measuring capital as a percent of balance sheet, aka the Leverage Ratio. The Daily Telegraph reported this weekend that the PRA will seek to supplement existing reporting with a a more stringent based on daily averages, moving in line with US practice. Apparently, the regulator wishes to mitigate any potential incentive to game reporting with the current point-in-time leverage ratio methodology. A part of this is also about improving transparency of balance sheets, with some attributing the current book values attached to US banks to improved transparency vis-a-vis their European rivals. The Daily Telegraph article can be found here: http://www.pressreader.com/uk/the-daily-telegraph/20150711/283115657629021/TextView and the PRA guidance can be found here:http://www.bankofengland.co.uk/pra/Pages/publications/cp/2015/cp2415.aspx
Reports are out that the BOE's bank regulatory arm is seeking to adjust its method of measuring capital as a percent of balance sheet, aka the Leverage Ratio. The Daily Telegraph reported this weekend that the PRA will seek to supplement existing reporting with a a more stringent based on daily averages, moving in line with US practice. Apparently, the regulator wishes to mitigate any potential incentive to game reporting with the current point-in-time leverage ratio methodology. A part of this is also about improving transparency of balance sheets, with some attributing the current book values attached to US banks to improved transparency vis-a-vis their European rivals. The Daily Telegraph article can be found here: http://www.pressreader.com/uk/the-daily-telegraph/20150711/283115657629021/TextView and the PRA guidance can be found here:http://www.bankofengland.co.uk/pra/Pages/publications/cp/2015/cp2415.aspx
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