Traditional measures of leverage in the financial system tend to reflect bank balance sheet data. The paper argues that these traditional, bank-centric measures should be augmented by considering pledged collateral in the financial system since pledged collateral provides a measure of an important part of nonbank funding to banks. From a policy perspective, the paper suggests that a broader view on leverage will enhance our understanding of global systemic risk, and complement the theoretical work in this field by providing a link from micro-level leverage data to macro aggregates such as credit to the economy.
International Monetary Fund; March 2018
- ISBN: 9781484348338
- Read online, or download in secure PDF format
- Title: Leverage—A Broader View
- Author: Manmohan Singh; Zohair Alam
Imprint: INTERNATIONAL MONETARY FUND