What is important is that economic policies and, in particular, fiscal policies are consistent with, and supportive of, the objectives of monetary union, including the objective of price stability. The present institutional framework is overall adequate to allow the ECB to perform is tasks effectively. Otmar Issing steps down as executive board member next may.
Conceptually, the leverage ratio sits there as a backstop limiting the overall size of institutions’ balance sheets. Whether it binds in practice depends on the structure of the whole balance sheet. Given the general tendency to fund inventory with repo, the leverage ratio can affect the size of the inventory a dealer is willing to hold to make a market.