The risk of leverage, particularly when built up with short term borrowings, and the consequential impact of deleveraging during periods of stress by withdrawing credit to the real sector, accentuated the crisis. The Basel Committee has, therefore, introduced a simple, transparent, non-risk-based leverage ratio as a supplementary “backstop” measure  BIS central bankers’ speeches  5  to the risk-based capital requirements.
We argue that our economy is in a better position now to withstand such a worst case scenario (given our level of reserves, low external debt, the HSF etc.). Obviously addressing such a worst case scenario would call for major adjustment in both the public and private sectors. Thank you Ladies and Gentlemen. BIS Review 149/2008  3