Capital adequacy and leverage ratios for dummies
Ahh, Switzerland – the land of cheese, chocolate, and… banking regulation? While you may not associate the alpine nation with strict rules on financial institutions, if you come across speakers of Financese, you will hear about the Basel committee. From what we gather, the Basel rules have become the agreed way of doing things. What things, you might ask? Risk management things mostly: measuring capital adequacy, leverage ratios, etc. To help us sort out everything, we are joined once again on ‘A Dictionary of Finance’ podcast by Vincent Thunus. You may recall he was on our show a few weeks ago to play a banking game that he developed to teach high school students about credit risk, liquidity risk, and other risks. Disclosing, measuring, and maintaining capital adequacy and leverage ratios are some of the tools used to mitigate these risks. See acast.com/privacy for privacy and opt-out information.