Final answer:
The statement is false because regulatory-defined capital and required leverage ratios do not solely rely on historical or book value accounting concepts; instead, they often reflect current market values and risk levels, as exemplified by frameworks like Basel III.
Step-by-step explanation:
Regarding the statement that with the exception of the investment banking industry, regulatory-defined capital and required leverage ratios are based in whole or in part on historical or book value accounting concepts, the correct answer is false. Capital and leverage ratios are a significant aspect of bank regulation, which is designed to maintain the solvency of banks by avoiding excessive risk. These ratios are in part based on the risk-weighted assets, which consider current market values and the perceived risk level of assets, rather than solely on historical or book value accounting concepts.
For instance, the Basel III framework includes measures that require banks to hold a certain level of capital based on risk-weighted assets. This framework distinguishes between different types of assets based on their risk profiles and assigns weights accordingly. Such an approach goes beyond historical costs and incorporates both the potential for loss and market fluctuations into capital adequacy assessment.
Similarly, leverage ratios, while being simpler measures not based directly on risk assessment, still may include references to market values of certain off-balance sheet exposures, further indicating that regulation does not rely exclusively on historical or book value accounting concepts.