Improving Banking Supervisory Mechanisms
In the OIC Member Countries
35
Figure 30: Liquid Assets over Short Term Liabilities
Source: IMF-FSI
3.1.6 Leverage Ratios in Selected OIC Countries
Another critical criterion in BASEL III is the leverage ratio. A simple ratio known as leverage
ratio is capital divided by assets of on- and off balance sheet. According to BASEL III banks
should hold at least 3% of leverage ratio. The higher the ratio the lesser the risk is. In below,
we have documented the leverage ratio in selected OIC member states in a comparison to US
and EU. As many of the countries do have limited off balance sheet items, this ratio tended to
be higher than 3%. Therefore one could say that leverage ratio will not put a restriction against
OIC member states.
Figure 31: Leverage Ratio
Source: IMF-FSI
0
10
20
30
40
50
60
70
80
90
Turkey Malaysia Saudi Arabia Pakistan Indonesia Nigeria Kazakhistan
Liquid Assets to Short Term Liabilities
2009
2010
2011
2012
2013
0
2
4
6
8
10
12
14
16
Leverage Ratio
2008
2009
2010
2011
2012
2013