Abstract
Large and complex banking groups are facing new demands to prove their soundness, after central bankers expressed concerns over their exposure and their leverage. On June 20, 2014, the Bank of England’s regulatory arm—the Prudential Regulatory Authority (PRA)—announced that both Barclays and Nationwide Building Society had fallen short of a 3 percent leverage ratio, which expresses capital as a proportion of total assets. Adjusting for projected risks, Barclays’ leverage ratio was only 2.5 percent, while Nationwide’s was just 2 percent.
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Notes
D. N. Chorafas, Managing Risk in the New Economy (New York: New York Institute of Finance, 2001).
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© 2015 Dimitris N. Chorafas
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Chorafas, D.N. (2015). A Structure of Analysis through Stress Testing. In: Financial Cycles. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137497987_8
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DOI: https://doi.org/10.1057/9781137497987_8
Publisher Name: Palgrave Macmillan, New York
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