Risk-weighted assets proved useful indicator during crisis, says IMF paper
Banks with higher risk-weighted assets performed the worst during the global financial crisis, as investors used risk-weighted assets as an indicator of bank portfolio risk, according to an International Monetary Fund paper, published on January 30.
Sonali Das and Amadou Sy, the paper's authors, study how investors account for the riskiness of banks' risk-weighted assets by examining the determinants of stock returns and market measures of risk. The authors note there was a steady decline in the
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