The risk of bubbles But that was then and this is now – surely we have learned our lessons and there is little risk of a repetition of the years of imprudent lending? Two factors suggest to me that we must always be on the lookout for risky lending.
The minimum TLAC requirement, which is expressed as a ratio of both risk-weighted assets (RWAs) and the Basel III leverage exposure measure, is being phased in between 2019 and 2022. In terms of capital, clear progress has been made. The Tier 1 capital ratios of G-SIBs have doubled since 2011. Over the same period, leverage ratios have nearly doubled as well.