Banks in Europe and America are always under pressure to add to capital with stress rests, in order to withstand any potential, future credit problems.
Risk-weighted
assets can be assumed to be as high as 70% of total assets in the
large U.S. banks. The stress figure in Europe is half that for
various accounting reasons; which are not that strong.
In
other words, the assessments are pretty much subjective.
Furthermore,
it’s all nonsense. As panic=driven problems will negate supposed
cushions as will a tendency to have mark-to-market accounting.
Much
of what goes on is political maneuvering and posturing. (See
the Earl J Weinreb NewsHole® comments.)
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