How much capital U.S. banks need, some numbers

Yesterday Bloomberg ran a qualitative story on how much capital U.S. banks need. The story mentions some percentages, and then settles for a  leverage ratio of 20%. However, the author of the article, James Greiff,…

Leverage Capital Ratios vs Risk-Based Capital Ratios of U.S. Banks, a graph.

Following up on my graph on corporate versus bank solvency ratios, this graph illustrates the difference between two Tier 1 ratios reported  by U.S. Bank Holding Companies over 2001-2012. The blue histogram shows the Tier…

ABN Amro’s dodgy spin-off readiness

Yesterday the Dutch government announced that it asked ABN Amro to prepare for re-floating on the stock market. The Dutch bank was nationalized in 2008 after the collapse of Fortis. With EU requirements on State support for ABN…

Update on Deutsche

Shortly after my posting, Deutsche announced it would not call its perpetual bond, reports Reuters. One rationale for not calling could be that the bond would still be useful as bailinable debt. An interesting trade-off…

Jay! Reposted on Confessions of a Supply-Side Liberal and Pieria

Miles Kimball’s  Confessions of a Supply-Side Liberal mentions my post on Convertible Capital instruments. Note the apt picture! Update: Pieria also features the repost of Miles.

Deutsche’s phase-out of old-style capital securities and the meaning of perpetual debt

On July 17, I posted on this blog about the difficulties that EU banks face when replacing pre-crises capital securities with Basel III compliant securities. Today the WSJ illustrates these difficulties for Deutsche Bank. This…

Some housekeeping on CoCo’s

I added the NZ Open Bank Resolution framework to my list of links, on the left. This in light of the CoCo discussion on my blog. For ease of use, see below: NZ Recovery and Resolution…

Solvency management by the denominators

One way a bank can manage its solvency is by changing the denominator of its solvency ratio, in this case of its BIS ratio. (The BIS ratio is the ratio of capital divided by Risk…

Leverage of U.S. Banks and Corporates, a graph.

There is lots of talk going on about bank leverage. But how does it look? The plot below shows solvency ratios for U.S. banks (red) and U.S. corporates (blue). It looks different. Note, these are…