Bank leverage, financial fragility and prudential regulation
type: Dataset
description: We analyse the determinants of banks' balance-sheet and leverage-ratio dynamics and their role in increasing financial fragility. Our results are twofold. First, we show that there is a value of bank's leverage that minimises financial fragility. Second, we show that this value depends on the overall business climate, the expected value of the collateral and the riskless interest rate. This result leads us to advocate the establishment of anadjustableleverage ratio, depending on economic conditions, rather than the fixed ratio provided for under the new Basel III regulation.
landing page: https://shs.hal.science/halshs-00853701
keyword: bank-leverage
keyword: financial-instability
keyword: infoeu-reposemanticspreprint
keyword: jel-e---macroeconomics-and-monetary-economics
keyword: jel-e---macroeconomics-and-monetary-economicsee5---monetary-policy-central-banking-and-the-supp
keyword: leverage-ratios
keyword: preprints-working-papers-
keyword: prudential-regulation
keyword: shsecohumanities-and-social-scienceseconomics-and-finance
issued: 2026-05-10T00:57:12.071600
modified: 2026-05-10T00:57:12.071604
language: en
contact point: Organization
  fn: CCSD

test_moissonnage_selune
type: Agent

Bank leverage, financial fragility and prudential regulation
type: Distribution
format: HTML
access URL: https://shs.hal.science/halshs-00853701
issued: 2026-05-10T00:57:12.080782
modified: 2026-05-10T00:57:12.058323