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It absolutely does say that. The whole of part 1, "Minimum capital requirements and buffers" is 100% based on capital, and deposits don't factor in to any of th
by stephen_g 8y ago
It absolutely does say that. The whole of part 1, "Minimum capital requirements and buffers" is 100% based on capital, and deposits don't factor in to any of the definitions of Tier 1 capital. The leverage ratios also factor entirely from capital that doesn't include deposits.
- cm2187 8y ago100% is the conversion of a loan balance to leverage exposure. The capital requirements vary between banks and regulator, but they are typicaly 3-5% of the leverage exposure. A leverage ratio requirement of 100% would make lending uneconomical. To achieve a return on equity of 10%+, you would have to charge over 10% on your loans.