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Leverage Ratios for Different Bank Business Models

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Grossmann, D. Leverage Ratios for Different Bank Business Models. Credit and Capital Markets – Kredit und Kapital, 50(4), 545-573. https://doi.org/10.3790/ccm.50.4.545
Grossmann, David "Leverage Ratios for Different Bank Business Models" Credit and Capital Markets – Kredit und Kapital 50.4, 2017, 545-573. https://doi.org/10.3790/ccm.50.4.545
Grossmann, David (2017): Leverage Ratios for Different Bank Business Models, in: Credit and Capital Markets – Kredit und Kapital, vol. 50, iss. 4, 545-573, [online] https://doi.org/10.3790/ccm.50.4.545

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Leverage Ratios for Different Bank Business Models

Grossmann, David

Credit and Capital Markets – Kredit und Kapital, Vol. 50 (2017), Iss. 4 : pp. 545–573

2 Citations (CrossRef)

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David Grossmann, MBA, PhD-student at Andrássy University Budapest and Claussen-Simon Graduate Centre at HSBA, Alter Wall 38, 20457 Hamburg, Germany

Cited By

  1. The golden rule of banking: funding cost risks of bank business models

    Grossmann, David | Scholz, Peter

    Journal of Banking Regulation, Vol. 20 (2019), Iss. 2 P.174

    https://doi.org/10.1057/s41261-018-0080-5 [Citations: 4]
  2. The Golden Rule of Banking: Funding Cost Risks of Bank Business Models

    Groomann, David | Scholz, Peter

    SSRN Electronic Journal , Vol. (2017), Iss.

    https://doi.org/10.2139/ssrn.3086828 [Citations: 0]

Abstract

The development of the Basel III leverage ratio does not consider the different risk characteristics of bank business models. All banks have to achieve the same requirements even if a high-risk business model is chosen. For that reason, leverage ratios which are adjusted to the risk-profile of retail, wholesale, and trading banks are developed. Based on Value-at-Risk and Expected Shortfall calculations, the left-hand tail of a net return on non-risk-weighted assets distribution of 120 European banks is analyzed. Retail banks are less risky and can withstand financial distress with a smaller amount of capital.

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