Sunday, April 9, 2023

U.S. Banks With Largest Held-to-Maturity Losses

Click here to read the original Cautious Optimism Facebook post with comments

 From the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff: A list of America's top banks with the largest held-to-maturity securities losses as a share of their equity capital buffer (click to enlarge and see rightmost column: "Perc").

The Correspondent's memory of Common Equity Tier 1 (CET1) capital ratios is a bit old, but he recalls around the 2008 financial crisis if a bank's ratio of equity capital to risk-weighted-assets was more than 8% it was considered "well capitalized" by regulators.

6%-8% was "adequately capitalized."

4%-6% and regulators ordered the bank to immediately raise money and recapitalize.

Under 4% and the bank was immediately seized by regulators and sold off or wound down.

Any CO readers who work with bank regulators and know updated CET1 capital ratio rules for the year 2023 feel free to share in the comments section.

Basel III rules apply higher capital ratio premiums to GSIB banks like JP Morgan Chase, HSBC, BNP Paribas, or Mitsubishi UFJ to name a few.

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