LTCM’s pre-crisis leverage matched the big investment banks’ ratio.

Evidence

LTCM’s pre-crisis leverage ratios were not, in fact, egregious when compared, for example, to those of investment banks. In the early months of 1998, LTCM’s leverage ratio was around 27: 1 (Perold 1999, pp. C 11-C 12). 27: 1 was the average ratio of the five biggest investment banks at the end of 1998 (President’s Working Group on Financial Markets 1999, p. 29). — Donald MacKenzie, An Engine, Not a Camera, 1020

Categorization

• XREF: connects to: LTCM’s extreme leverage did not necessarily mean extreme risk — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 982

Broader Connections

• LTCM’s extreme leverage did not necessarily mean extreme risk #qualifies (0.82) — Donald MacKenzie, An Engine, Not a Camera, 982