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Solutions Exchange Product Spotlight: Are Tier 1 Capital Ratios Enough To Give Investors A Clear Picture of Bank Capital Adequacy? Sep 11

  • ID: 1886609
  • September 2011
  • Standard & Poors
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With that in mind, Standard and Poor's Ratings Services developed the risk-adjusted capital framework (RACF), which allows a comparable view of a bank's capital ratio. Standard & Poor's RACF strives to achieve global comparability and consistency in capital ratios, seeking to neutralize the effect of regulatory regimes, national discretion, Basel II options, and individual bank's risk assessments. The framework was introduced in April 2009 to address comparability issues with the regulatory ratios that persist under Basel III. For example, the Commonwealth Bank of Australia's Tier 1 capital ratio as of December 2010 would be 13.5% under FSA rules, instead of 9.7% under the Australian rules, according to a research article published by Standard and Poor's Ratings Services (see "Standard &...

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown