Leverage—A Broader View

IMF Working Papers, March 19, 2018

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Leverage—A Broader View

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Bibliographic details

• Authors: Manmohan Singh, Zohair Alam
• Published: March 19, 2018
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781484347034.001

Core findings

• 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.

Policy implications and recommendations

• Augment bank-centric leverage measures with measures of pledged collateral to capture nonbank funding to banks.
• Use a broader view on leverage to enhance understanding of global systemic risk.
• Leverage measures that link micro-level leverage data to macro aggregates such as credit to the economy can complement theoretical work in the field.

Publication and metadata

• Title: Leverage—A Broader View
• Authors: Manmohan Singh, Zohair Alam
• Date: March 19, 2018
• Series: Working Paper No. 2018/062
• Issue: 062
• Volume: 2018
• Pages: 28
• DOI: https://doi.org/10.5089/9781484347034.001
• Stock No: WPIEA2018062
• ISBN: 9781484347034
• ISSN: 1018-5941
• Subject: Accounting standards; Bank credit; Banking; Collateral; Commercial banks; Financial institutions; Financial statements; Money; Public financial management (PFM)
• Keywords: Accounting standards; Bank credit; bank leverage; bank-nonbank nexus; Collateral; Commercial banks; financial stability; Financial statements; Global; leverage ratio; nonbank funding; nonbank leverage; nonbank relationship; nonbank-bank nexus; off-balance sheet; pledged collateral; regulations; WP

Source: IMF Working Papers — "Leverage—A Broader View" by Manmohan Singh and Zohair Alam, March 19, 2018.

Content in this bundle

• Leverage—A Broader View, WP/18/62, March 2018
  • Leverage—A Broader View, WP/18/62, March 2018 (Markdown version)
  • Leverage—A Broader View, WP/18/62, March 2018 (PDF)