Simple indicators better for regulators, BoE economist argues

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Based on the experience of the 2008 financial crisis, prudential regulators should pay more attention to simple ratios such as leverage, and less to more complex and model-dependent ones such as risk-based capital, Bank of England economist Sujit Kapadia argued in a seminar at the London School of Economics last Friday.

Kapadia, senior manager for financial stability in the bank's prudential policy division, called for regulators to consider simpler decision-tree methods in determining whether

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