Our banking system is vulnerable...
Aug 19, 2011 12:28:51 GMT -5
Post by Cranky on Aug 19, 2011 12:28:51 GMT -5
Something is fishy....first, a primer.....
Tangible Common Equity (TCE) refers to the subset of shareholders' equity that is not preferred equity and not intangible assets.[1][2]
TCE is an uncommonly used measure of a company’s financial strength. It indicates how much ownership equity owners of common stock would receive in the event of a company’s liquidation. During the financial and economic crisis of 2008-2009, it gained public popularity as a measure of the viability of large commercial banks.
TCE, when used in a ratio with tangible common assets, is a measure of a bank's ability to absorb losses (e.g., homeowners defaulting on mortgages) before becoming insolvent. It is one of the factors considered by the Office of the Comptroller of the Currency to determine if a bank has become insolvent.
4% is considered good. 2% is considered risky. Look at the numbers....
Tangible Common Equity (TCE) refers to the subset of shareholders' equity that is not preferred equity and not intangible assets.[1][2]
TCE is an uncommonly used measure of a company’s financial strength. It indicates how much ownership equity owners of common stock would receive in the event of a company’s liquidation. During the financial and economic crisis of 2008-2009, it gained public popularity as a measure of the viability of large commercial banks.
TCE, when used in a ratio with tangible common assets, is a measure of a bank's ability to absorb losses (e.g., homeowners defaulting on mortgages) before becoming insolvent. It is one of the factors considered by the Office of the Comptroller of the Currency to determine if a bank has become insolvent.
4% is considered good. 2% is considered risky. Look at the numbers....