For example, in 20 16, China's GDP was GDP74.4 trillion yuan, and the loan balance of residential sector was about 33.33 trillion yuan. After the division, the leverage ratio of the residential sector was 44.8% at the end of 20 16.

Leverage ratio generally refers to the ratio of equity capital to total assets in the balance sheet. Leverage ratio is an index to measure the debt risk of a company, which reflects the repayment ability of the company from the side. The reciprocal of leverage ratio is leverage ratio. Generally speaking, the leverage ratio of investment banks is relatively high. In 2007, the leverage ratio of Merrill Lynch was 28 times and that of Morgan Stanley was 33 times.

Advantages of leverage ratio

The introduction of leverage ratio as a supplementary means of capital supervision has the following advantages: first, it reflects the role of real money invested by shareholders in protecting depositors and resisting risks, which is conducive to maintaining the minimum capital adequacy ratio of banks and ensuring that banks have a certain level of high-quality capital (common stock and retained profits). Second, it can avoid the complexity of weighted risk capital adequacy ratio and reduce the space of capital arbitrage. The lessons of this financial crisis show that under the framework of the New Capital Accord, if commercial banks take advantage of the complexity of the New Capital Accord to carry out regulatory arbitrage, it will seriously affect the capital level of banks. Relevant data show that the core capital adequacy ratio and leverage ratio of some banks deviate.