Bank Analysis School eBook

Internal Use Only

How to Assess Capital Adequacy

Understand the bank’s capital levels

•What are they? •What changes have occurred since the prior examination? • Are levels in line with the bank’s risk profile?

Internal Use Only

How to Assess Capital Adequacy • Dividends What Capital obligations does the bank have?

What do Capital plans look like?

• Includes augmentation, dividend, and contingency

• Does the bank perform Capital stress testing? What Capital stressors does the bank have? • From who? How much? How long to get it? If the bank needs Capital, does it have access?