BoE’s Woods rejects call to exempt gilts from leverage rule
Bank capital regime must account for sovereign bonds’ interest rate risks, PRA chief says
A senior official at the Bank of England has warned against industry calls to exempt sovereign bonds from the UK’s leverage ratio requirements.
Sam Woods, who heads the BoE’s Prudential Regulation Authority, argued on October 22 that the financial sector’s proposal to exclude highly rated government bonds from leverage ratio calculations would constitute a “profound” and “highly risky” change.
“In my view such a change would be equivalent to ripping off our jacket, warm hat and gloves and throwing
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