Bank of England sets out bank capital concerns

UK central bank describes risk-weighted asset calculations 'unreliable' and urges banks to set out their leverage ratios at least two years ahead of the Basel III deadline

Risk-weighted asset calculations are unreliable and return on equity targets are unrealistic, according to the Bank of England in its hard-hitting financial stability report, published this morning.

The central bank said that financial institutions should rely less on RWAs and RoE and instead set out their leverage ratios - which compare a bank's assets to its available capital - at least two years ahead of the regulatory deadline.

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