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Are you saying that they're using their private-credit portfolio as a Tier 1 capitalization to meet their regulatory demands (not sure if the ~10-15 something%
by r_lee 8mo ago
Are you saying that they're using their private-credit portfolio as a Tier 1 capitalization to meet their regulatory demands (not sure if the ~10-15 something% rule has come back yet?)
Been a bit out of the finance game
- JumpCrisscross 8mo ago> they're using their private-credit portfolio as a Tier 1 capitalization Banks' private-credit lending constitutes part of their risk-weighted assets. So yes, it's part of their CET1 [1], which is part of Tier 1 capital, and since it's equity measured it incorporates fucking everything. 4.5% is the U.S. minimum. Regulators start throwing their toys out of the pram when a bank breaches 7%. To be clear, I'm not seeing anyone in the near future breaching those limits. Deutsche Bank, the stupidest of the lot, seems to have let DB USA stuff most of the risk in its German AG. [1] https://www.investopedia.com/terms/c/common-equity-tier-1-cet1.asp https://www.investopedia.com/terms/c/common-equity-tier-1-ce...
- reactordev 8mo agoNo one is paying attention that has any kind of plan to fix it. We’re just going to watch it crumble and the governments bail them out again.