Tier 1 Capital Ratio (also called the Tier 1 Risk Based Capital Ratio) divides a bank's core equity capital by the total amount of its risk weighted assets (RWA). It is one of a handful of ratio that help bank regulators understand the capital adequacy of a bank.
What is a Credit Default Swap (CDS)? Credit Default Swaps (CDS) are contracts that transfer credit product (fixed income products/sovereign and corporate bonds) risk between two parties. The seller of CDS protection (Sold Protection) takes on the risk of having to pay the notional amount of the CDS if the credit product that is tied [...]
The idea of Risk Weighted Assets is to determine the Capital needs of a bank based on the level of riskiness of the assets that the bank possesses . If a bank holds riskier assets than Capital requirement will also be higher and vice versa. It is calculated simply by multiplying the asset with a [...]
It is the trend analysis of the Texas Ratio. The Texas Ratio Trend takes into account the change in a bank or credit unions Texas Ratio over a certain period of time (our Texas Ratio Trend measures quarter to quarter change) and shows whether the trend is rising (is bad) or declining (is good). The [...]
Total Liabilities are the legal financial obligations that need to be fulfilled by a bank or credit union. Total liabilities are the sum of current and non-current liabilities of a financial institution and are expressed as: Total Liabilities = Current Liabilities + Non-Current Liabilities Where in current liabilities include the debt or financial obligations which [...]
Common stock is a type of equity (ownership) in a bank (company). Common stock has voting powers and the right to elect the Board of Directors (in some cases there are different classes of common stock: voting and non-voting). In the event of bankruptcy, common stock sits behind preferred stock, debenture holders, and creditors when [...]
Right now, we’re looking at record low interest rates. As a result, many people are thinking about refinancing their homes. Refinancing to a lower interest rate can save you in terms of monthly payment, as well as in terms of what you pay overall. Can you really save that much? And is it really worth [...]
Large enough to handle most issues: Your emergency fund should be large enough to handle most issues, including car repairs, new appliances, and other similar costs. Your goal in building an emergency fund should also be to create enough capital that, if you needed it, you could cover your living expenses in the event that [...]
Thrift financial data is currently not available on the site (we have location and branch data for all thrifts). You can tell your on a thrift's page when you see N/A across all the financial ratio boxes. We will have the most current thrift data for you in June, so please come back to Knowyourbank. [...]
Your credit score amounts to your financial reputation. If you want the best interest rate on a mortgage, and the lowest insurance premiums, you need a good financial reputation. Banks, lenders, insurers, and others offering financial products and services need to feel that you are an acceptable risk. Cultivating a good credit score is an [...]
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