UBS Tells Davos Leverage Ratio Over-Reliance Threatens Stability
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UBS AG, Switzerland’s biggest bank, said a shift in emphasis to leverage ratios from risk-based capital measures could endanger financial stability.
“We caution against over-reliance on leverage ratios as a regulatory tool,” UBS said in a report, which the Zurich-based bank prepared for release at the World Economic Forum in Davos, Switzerland, and made available to Bloomberg. Such a focus “could lead to further deleveraging by banks and pose risks for financial stability.”