Measured by the ratio of total assets to tier 1 capital it was 24 for the largest groups in June 2009, as against 34 for the leading banks of the other European countries. The introduction of a prudential leverage ratio should therefore not have significant consequences.
The Contractual Approach, such as that embodied in collective action clauses (CAC) inserted into bond contracts is more practical. It is decentralized and market based and does not require political agreement at the international level for statutory changes. As Mr. Otieno notes, bonds with collective action clauses have already been issued by some emerging markets.