Leverage ratio redux: the fallout from French bank court win

EU countries could seek to benefit from exclusion of state-backed deposits from leverage ratio

A ruling by a European court has given six of France’s largest banks cause for celebration, by allowing them to exclude deposits held at state-backed institutions from the calculation of an important metric of capital adequacy, the leverage ratio.

The celebrations foreshadow a wider change for lenders across the continent as separate revisions to the capital requirements regulation, known as CRR II, look set to write the exclusion into law for all European Union banks.

The July 13 court verdic

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