BoE’s Taylor defends complexity of leverage ratio plans
FPC member extols virtues of countercyclical leverage ratio design
The Bank of England (BoE) rejected the "glorious but spurious" simplicity of a flat leverage ratio for good reasons, Martin Taylor, an external member of the BoE's Financial Policy Committee (FPC), said in a speech today.
For the leverage ratio to properly complement capital requirements, which already vary over time, the leverage ratio needs to vary too, Taylor said. The BoE aims for "complementary neutrality" between the two, so which binds first depends on banks' business models. "If we don't
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