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Credit Engineering for Bankers, 2nd Edition by Johnathan Mun, Morton Glantz

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Chapter 13 Capital Adequacy

Chapter Outline

  • Functions of Bank Capital 311
  • A Historical Perspective 314
    • Traditional Asset Categories 314
  • The Basel Accords 315
  • Accounting, Economic, and Regulatory Defined Value 316
    • Economic or Market Denominated Capital 316
  • Regulatory Denominated Capital (Regulatory Accounting) 319
    • Tier 1 Capital 319
    • A Breakdown of Tier 1 Capital Components 320
      • Common Shareholder Equity 320
      • Perpetual Preferred Stock 320
      • Noncumulative Preferred Stock 321
      • Embedded Special Features in Preferred Issues 321
      • Convertible Perpetual Preferred Stock 321
      • Minority Interest in Equity Accounts of Consolidated Subsidiaries 321
    • Tier 1 Leverage Ratio 322
    • Tier 2 Supplemental Capital 323
    • Tier 3 Supplemental Capital 325
  • Regulatory ...

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