The leverage ratio is not the problem

Paul Kupiec

AEI Economics Working Papers from American Enterprise Institute

Abstract: Recent proposals have recommended important modifications to the supplemental leverage ratio (SLR) to promote the production of market liquidity and other beneficial banking activities that are alleged to have declined because of the introduction of Basel III capital regulations. A much better solution for promoting liquidity is to significantly raise the minimum SLR to minimize the debt-overhang problem and revise the deposit insurance pricing system so that premiums are much closer to fair market prices for the insurance.

Keywords: premiums; What to Do: Policy Recommendations Financial Policy; Basel Comittee on Banking Supervision (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2017-08
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