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"In this environment you want to look for companies with lower leverage and clear funding capabilities".
But lower leverage threatens to yield sharply lower returns in future.
Second, higher equity means lower leverage, which could reduce RoE below investors' expectations.
The Fed believes that lower leverage eliminates the need for bailouts, as banks can pay for their own mistakes.
The analysis also cautions against concluding that bank leverage must be too high because operating firms maintain much lower leverage.
And Ms. Clancy's clients, with lower leverage, have been able to undercut competitors who are struggling under greater debt.
Similar(10)
Mr. Vitter and Mr. Brown acknowledge that their bill would set the capital bar for regional banks even lower than current market practices, including by lowering leverage capital ratios to 8 percent from 10 percent of assets.
"We felt like we had an opportunity with some of their lower-leverage guys coming out of the bullpen, but they've got good arms," Toronto outfielder Kevin Pillar said.
Essentially, you will get lower-leverage non-recourse debt, at the most aggressive interest rates in the market, with notably shorter amortizations.
Manager Mike Scioscia, as expected, said veteran right-hander Joe Smith will assume the ninth-inning relief role beginning with Friday night's game against the New York Yankees, and the struggling Frieri will pitch in lower-leverage situations.
In particular, we find that CEOs' risk-decreasing (-increasing) incentives are associated with lower (higher) leverage and higher (lower) cash balances.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com