Banks' leverage needs limits

<div>MUCH stricter system-wide limits on banks&rsquo; leverage are needed, the Bank of England&rsquo;s executive director for financial stability Andrew Haldane said yesterday.<br /><br />&ldquo;These ratios will need to be state-dependent, rising as the temperature rises across the financial system as a whole.&rdquo;<br /><br />Haldane stressed there is a need for more focus on returns on assets rather than on equity, which can be magnified by leverage.&nbsp;</div>
<div>Returns need to be more accurately risk-adjusted if the right risk-return balance is to be struck, he said.</div>