Basel Committee reveals leverage ratio formula


The Basel Committee on Banking Supervision today unveiled proposals for how banks will be expected to calculate and disclose their leverage ratios, a major component of the Basel III framework.

The underlying formula – total assets divided by total exposures, expressed as a percentage – is relatively uncontroversial, but the problem of defining assets and exposures is much more complicated. The Basel Committee claims to have come up with definitions that will capture banks' on- and off-balance-s

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