The Basel Proposal called for the inclusion of assets that are originally off the banks' books, resulting into an average of 33% increase in the balance sheet of most investment banks around the world, including that of Deutsche Bank.
This particular proposal was borne from global regulators taking into account leverage and not just risk weightings when assessing banks' financial positions. Global regulators' attention was caught when it was deemed that post-financial crisis banks were improving their capital ratios by changing internal models or reducing risk-weighted assets without actually streamlining or shrinking their balance sheets.
Deutshe Bank is not the only bank needing to acquire more capital. Barlays Plc, the third largest lender in Britain will have a strong leverage ratio by 2015 under this Basel Proposal. And yet, its capital would be insufficient in meeting Britain's Prundential Regulation Authority's leverage requirements, requiring it to raise more.
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