BOE mulls bank leverage ratio rules to curb window dressing

London

THE UK Prudential Regulation Authority (PRA) proposed requiring banks to report their leverage ratios daily in a bid to prevent them from gaming new rules intended to bolster financial stability.

Allowing lenders to report less frequently may tempt them to tweak their balance sheets around the reporting date, a process known as "window dressing", creating a false impression of the risks that they are carrying. Off-balance-sheet risks will be reported as a monthly average, and firms will be able to use best estimates, the London-based PRA proposed.