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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 Product Image

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

  • Published: September 2011
  • Standard & Poors

Abstract
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 READ MORE >

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