Bank leverage ratios have made an impressive and largely unopposed return; they are mostly used alongside risk …-weighted capital requirements. The reasons for this return are manifold, and they are not limited to the fact that bank equity levels … straightforward real estate loans. Bank leverage ratios are primarily seen as a microprudential measure that intends to increase bank …

highlight an opposite effect: higher profitability loosens bank borrowing constraints. This enables profitable banks to take … risk on a larger scale, inducing risk-taking. This effect is more pronounced when bank leverage constraints are looser, or …Traditional theory suggests that higher bank profitability (or franchise value) dissuades bank risk-taking. We …

The moral hazard incentives of the bank safety net predict that distressed banks take on more risk and higher leverage …, moral hazard incentives dominate distressed bank leverage and risk-taking policies … include financial crises and are subject to different regulatory regimes (1985–1994, 2005–2014). We find that distressed banks …

After the collapse of Lehman Brothers, a rapid and far-reaching shrinkage of international banks’ assets with a focus …-term wholesale funding proved to be a disadvantage, while good capital endowment (core Tier 1 capital to RWA ratio), deposit funding …