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Reducing leverage isn't enough.
Banks have been furiously reducing leverage.
But was reducing leverage the only fix that was needed?
Timothy Geithner, the former Treasury Secretary, was one of the main proponents of raising capital levels and reducing leverage ratios.
This may look like a Democratic or progressive dream, but some Republicans have also supported reducing leverage for banks.
But this contingent debt would also give bankers an incentive to limit risk by, say, reducing leverage.
Similar(35)
They included a demand that British banks further reduce leverage.
"They want risk controls, reduced leverage and more transparency," Mr. Reid said.
The literature on leverage until now shows how an increase in volatility reduces leverage.
Banks should hold less capital in good times and reduce leverage when losses loom.
Rules on capital will be overhauled to reduce leverage and enhance the system's resilience.
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