Financial questions and calculations - Speech or Presentation Example

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This capital turned out to be dud capital during the financial crisis as the profits which were booked temporarily to cover market risk turned out…

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Subject: Miscellaneous
Type: Speech or Presentation
Level: Undergraduate
Pages: 4 (1000 words)
Downloads: 2
Author: nataliakohler

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d assets, total Tier 1 capital must be at least 6% of risk adjusted assets, and total capital (Tier 1 + Tier 2) must be at least 8 % of risk adjusted assets. (BIS) g) Further to (f), the Basel Committee is also proposing that, outside periods of stress, banks hold capital above the regulatory minimum as a conservation buffer, large enough to remain above the minimum even in a sector-wide downturn. The recommended or benchmark size of the buffer is 2.5% of risk-adjusted assets and the buffer should be comprised of common equity after application of deductions.

Comments: Capital ratio is well within the requirement of the BASEL iii norms i.e. total capital ratio more than 10%. In case of liquid ratio it is more like Tier capital1 to total assets which should be more than 4.5 as per the BASEL iii norms. In case of this the liquidity ratio is

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