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The banking authority said that emergency government aid would still qualify as core capital.
What bothered the West was that Japanese regulators allowed their banks to count shareholdings as core capital.
Bankers and their ruling party allies trained their heaviest fire on a proposal to limit the use of tax breaks as core capital.
DTAs account for about 37% of Spanish banks' core tier-1 capital, but do not count as core capital under the new Basel 3 global banking rules.
Part of the answer is already being provided by regulators, who are tightening the definitions of what counts as core capital, capping total leverage and carefully scrutinising the risk-weightings that banks apply.
The bank said it had met the ratio largely by converting 6.8 billion euros of bonds into shares, retaining profits and transferring a 4.4 percent position in its Brazilian unit to an outside investor, thus allowing the stake to be counted as core capital.
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Mitsui Trust's stockholdings are estimated to be twice as large as its core capital, making the bank highly vulnerable to the performance of the stock market.
The banks' level 3" assets, which are illiquid and hard to value, are still $346 billion—almost as much as their core capital.
With breaks on future taxes accounting for as much as 40percentt of major banks' core capital, Mr. Takenaka wanted to reduce this figure to 10percentt in two years.
It is for this reason that Basel 3 is likely, however much the banks squeal, to take a firm line on excluding low-quality instruments such as preference shares from core capital.
The two groups had core capital (as defined by their regulator) of $83.2 billion at the end of 2007 (see chart 2); this supported around $5.2 trillion of debt and guarantees, a gearing ratio of 65 to one.
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