How New Leverage Ratios Will Affect US, UK & Europe

Citi Analysts Jason Shoup, Sonam T Pokwal and Swati Verma review the current regulatory confusion regarding the leverage ratio in banks, and the implications for their business after implementation. An earlier article titled ‘UBS Investment Research – The Vexed Question of Leverage and European Investment Banks’ appeared in Valuewalk on September 17. Inconsistent capital regimes The leverage ratio could be implemented with ‘material differences’ between the U.S., the U.K. and the rest of Europe – i.e. three distinct capital regimes, in the  words of the analysts. Differences exist in the schedules of implementation, the treatment of derivatives, the computation of…