{"id":2750,"date":"2008-08-29T13:38:53","date_gmt":"2008-08-29T17:38:53","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=2750"},"modified":"2008-08-29T13:38:53","modified_gmt":"2008-08-29T17:38:53","slug":"bank-constraints-3q08","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=2750","title":{"rendered":"Bank Constraints: 3Q08"},"content":{"rendered":"

This updates a review of Canadian bank constraints for 2Q08<\/a>.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Big-6 Bank Constraint Summary
\n3Q08<\/td>\n<\/tr>\n
 <\/td>\nNote<\/td>\nRY<\/a><\/td>\nBNS<\/a><\/td>\nBMO<\/a><\/td>\nTD<\/a><\/td>\nCM<\/a><\/td>\nNA<\/a><\/td>\n<\/tr>\n
Equity Capital<\/td>\nA<\/td>\n17,892<\/td>\n16,310<\/td>\n13,609<\/td>\n13,563<\/td>\n8,695<\/td>\n3,930<\/td>\n<\/tr>\n
Tier 1 Cap<\/td>\nB<\/td>\n24,150<\/td>\n22,075<\/td>\n18,047<\/td>\n17,491<\/td>\n11,626<\/td>\n5,534<\/td>\n<\/tr>\n
Tier 2 Cap<\/td>\nC<\/td>\n5,578<\/td>\n3,969<\/td>\n4,353<\/td>\n7,211<\/td>\n5,461<\/td>\n2,196<\/td>\n<\/tr>\n
Total
Capital<\/td>\n		D<\/td>\n29,728<\/td>\n26,044<\/td>\n22,400<\/td>\n24,702<\/td>\n17,087<\/td>\n7,730<\/td>\n<\/tr>\n
Tier 1 Ratio<\/td>\nE<\/td>\n9.5%<\/td>\n9.8%<\/td>\n9.9%<\/td>\n9.5%<\/td>\n9.8%<\/td>\n10.0%<\/td>\n<\/tr>\n
Total Ratio<\/td>\nF<\/td>\n11.7%<\/td>\n11.5%<\/td>\n12.3%<\/td>\n13.4%<\/td>\n14.4%<\/td>\n13.9%<\/td>\n<\/tr>\n
Assets to
Capital
Multiple<\/td>\n		G<\/td>\n19.4<\/td>\n17.8<\/td>\n15.9<\/td>\n17.9<\/td>\n17.7<\/td>\n15.7<\/td>\n<\/tr>\n
RWA to
T1R = 7%<\/td>\n		H<\/td>\n+36%<\/td>\n+40%<\/td>\n+41%<\/td>\n+36%<\/td>\n+40%<\/td>\n+43%<\/td>\n<\/tr>\n
RWA to
TotR = 10%<\/td>\n		I<\/td>\n+17%<\/b><\/td>\n+15%<\/b><\/td>\n+23%<\/b><\/td>\n+34%<\/td>\n+44%<\/td>\n+39%<\/b><\/td>\n<\/tr>\n
Assets to
ACM = 20<\/td>\n		J<\/td>\n+3%<\/td>\n+12%<\/td>\n+26%<\/td>\n+12%<\/td>\n+13%<\/td>\n+27%<\/td>\n<\/tr>\n
Assets to
ACM = 23<\/td>\n		K<\/td>\n+19%<\/td>\n+29%<\/td>\n+45%<\/td>\n+28%<\/b><\/td>\n+30%<\/b><\/td>\n+46%<\/td>\n<\/tr>\n
A<\/b> : See Bank Capitalization Summary : 3Q08<\/a>
B<\/b>, C<\/b>, D<\/b>, E<\/b>, F<\/b>: From Supplementary Packages<\/p>\n

G<\/b>: See source notes from Note A reference; some are my estimates
H<\/b>: Percentage increase in Risk Weighted Assets that results in a Tier 1 Ratio of 7% [OSFI’s “Well Capitalized” benchmark]; = (E \/ 0.07 – 1) %
I<\/b>: Percentage Increase in Risk Weighted Assets that results in a Total Capital Ratio of 10% [OSFI’s “Well Capitalized” Benchmark]; = (F \/ 0.10 -1) %
J<\/b>: Percentage Increase in Assets that results in an Assets-to-Capital Multiple of 20x; = ((20 \/ G) – 1) %
K<\/b>: Percentage Increase in Assets that results in an Assets-to-Capital Multiple of 23x; = ((23 \/ G) – 1) %
The limiting constraint is bolded<\/b>.<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

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<\/a> over the issue, it has been assumed that the 20x multiple is simply stated for decorative purposes.<\/p>\n

It should also be noted that the calculation of the ACM has been recently revised by OSFI<\/a>, with what I must say is rather weak justification.<\/p>\n","protected":false},"excerpt":{"rendered":"

This updates a review of Canadian bank constraints for 2Q08. Big-6 Bank Constraint Summary 3Q08   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 …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-2750","post","type-post","status-publish","format-standard","hentry","category-regulatory-capital"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2750"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2750\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}