The Magic Lever
Donald MacKenzie: How the Banks Do It, 9 May 2013
“... ratios: go directly to the balance sheet, find the total equity and total assets, and divide. You may not find the exercise entirely reassuring.) Equity of less than – sometimes much less than – 5 per cent was in the case of many banks simply too little to allow them to absorb the losses incurred in the crisis. Between June 2007 and June 2009, the first ... ”