This updates a review of Canadian bank constraints for 2Q08.
| Big-6 Bank Constraint Summary 3Q08 |
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| Note | RY | BNS | BMO | TD | CM | NA | |
| Equity Capital | A | 17,892 | 16,310 | 13,609 | 13,563 | 8,695 | 3,930 |
| Tier 1 Cap | B | 24,150 | 22,075 | 18,047 | 17,491 | 11,626 | 5,534 |
| Tier 2 Cap | C | 5,578 | 3,969 | 4,353 | 7,211 | 5,461 | 2,196 |
| Total Capital |
D | 29,728 | 26,044 | 22,400 | 24,702 | 17,087 | 7,730 |
| Tier 1 Ratio | E | 9.5% | 9.8% | 9.9% | 9.5% | 9.8% | 10.0% |
| Total Ratio | F | 11.7% | 11.5% | 12.3% | 13.4% | 14.4% | 13.9% |
| Assets to Capital Multiple |
G | 19.4 | 17.8 | 15.9 | 17.9 | 17.7 | 15.7 |
| RWA to T1R = 7% |
H | +36% | +40% | +41% | +36% | +40% | +43% |
| RWA to TotR = 10% |
I | +17% | +15% | +23% | +34% | +44% | +39% |
| Assets to ACM = 20 |
J | +3% | +12% | +26% | +12% | +13% | +27% |
| Assets to ACM = 23 |
K | +19% | +29% | +45% | +28% | +30% | +46% |
| A : See Bank Capitalization Summary : 3Q08 B, C, D, E, F: From Supplementary Packages G: See source notes from Note A reference; some are my estimates |
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In determining the limiting factor, it has been assumed that 23x is the actual limit for the Assets to Capital multiple; OSFI has stated that 23x is OK as long as they meet certain conditions and otherwise apply for permission. Given that OSFI maintains a veil of secrecy over the issue, it has been assumed that the 20x multiple is simply stated for decorative purposes.
It should also be noted that the calculation of the ACM has been recently revised by OSFI, with what I must say is rather weak justification.