Banking regulators took another step to raise leverage ratios for the largest banks in a bid to prevent serious issues from another 2008-like market crash. Leverage ratio: $68 billion required as margin on over $400 trillion in OTC risks The largest banks, which will be required to keep in reserve $68 billion under the new plan, are said to have a significant combined exposure to OTC derivatives in excess of $400 trillion, according to the Comptroller of the Currency Administrator of National Banks quarterly report on derivatives activities. The leverage ratio is also designed to cover other potential bank losses,…
Regulators Increase Leverage Ratio of Largest Banks
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.