Credit Risk Measurement, Leverage Ratios and Basel III : Paper Presentation at the Third International Conference on Credit Analysis and Risk Management August 2014

This paper is aimed at providing an analysis of the recent updates which have taken place in respect of the Basel III Leverage Ratio and the Basel III Supplementary Leverage Ratio – both in relation to recent amendments introduced by the Basel Committee and proposals introduced in the United States.As well as highlighting and addressing gaps which exist in the literature relating to liquidity risks, corporate governance and information asymmetries, by way of reference to pre-dominant based dispersed ownership systems and structures, as well as concentrated ownership systems and structures, this paper will also consider the consequences – as well as the impact - which the U.S Leverage ratios could have on Basel III.Even though it is widely acknowledged that systems founded on concentrated ownership systems (that is, where a dominant shareholder prevails) are less susceptible to information asymmetries, it cannot be conclusively argued that such systems are immune from or less culpable of those issues associated with lack of transparency and inadequate disclosure requirements.Disclosure, stringent accounting, audit requirements which operate to a greater extent in many capital market economies and predominantly based dispersed ownership systems and structures, should serve as means of fostering greater transparency, disclosure and accountability.Hence should it still be concluded that structures based on concentrated ownership models are less susceptible to information asymmetries?