Yet at too great a degree of leverage, bank solvency is at risk".
To increase their ratio of capital to leverage, banks can either raise more money or shrink the total size of their financial holdings, or a combination of both.
The World Bank's entry into the arena of swaps and other hedging strategies is only one way that Mr. Zoellick wants to leverage bank resources.
Central banks and regulators encouraged the banks to take risks; the first by cutting interest rates during market crises; the second by lifting caps on the leverage banks could employ.
Today's fintech startups have learned to leverage banks' weaknesses and offer improved services and ease-of-use not by imitating banks but by creating a new layer on top of existing infrastructure.
That's why I think there is a strong case to look at the way in which you can hive off or insulate very high-risk, over-leverage banking activities from low-risk, high street retail banking".
That's because by de-leveraging, banks and other finance companies have to sell mortgage holdings at a discount.
That they probably have to be required to have less leverage, both banks and on banks, shadow banks, that the liquidity risk is big and therefore, liquidity buffers are important.
Similarly, we find that higher information asymmetry negatively affects public leverage and bank debt, in particular short-term bank financing.
We strongly support the work of central banks and regulators in developing new global rules on capital, liquidity and leverage for banks.
The demand for securitised assets was, in essence, a demand for leverage.If banks could not borrow from pension funds or other investors, they turned to other banks instead.
