The financial crisis has put to the forefront the long-debated issue of banks’ capital adequacy, showing that banks were much more fragile than they (and their regulators) pretended, also because they were allowed to push their leverage to levels much higher than any industrial company, or even a hedge fund, has never dreamt of.
European banks: Between a rock (need of more capital) and a hard place (low profitability)
Marco Onado, 23 February 2014
Assessing leverage in the financial sector through flow data
Javier Villar Burke, 14 November 2013
The build-up of leverage in the banking sector played a prominent role in the Global Crisis.1 A standard description the role of leverage corresponds with the typical profile of a financial bubble as reflected in the evolution of the banks of the Eurostoxx 50 (Figure 1).
What is the optimal leverage for a bank?
David Miles, 27 April 2011
At the height of the financial crisis, many highly leveraged banks found that their sources of funding disappeared – withdrawn due to fears over the scale of losses. In the fallout from this banking crisis, the economic damage has been enormous.
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- 13th Summer School in International Development Economics: Investment, Saving and Wellbeing in Developing Countries10 - 13 June 2014 / Palazzo Feltrinelli, Gargnano, Lake Garda (Italy) / Organisers: Centro Studi Luca d’Agliano, Centre for Economic Policy Research (CEPR), Paolo Baffi Center on International Markets, Money and Regulation, Department of Economics, Management and Quantitative Methods of the University of Milan, Department of Economics, Quantitative Methods and Business Strategies of the University of Milan Bicocca, Vilfredo Pareto Doctoral Program in Economics of the University of Turin, The Lombardy Advanced School of Economic Research (LASER).
- 3rd WB-BE Research Conference: Financing growth: Levers, Boosters and Brakes23 - 24 June 2014 / Banco de España headquarters in Madrid / This conference is sponsored by Banco de España and The World Bank