Introduction to Problem Banks eBook
Internal Use Only
New BASEL III Requirements
Total Risk Based Capital
Common Equity Tier 1 RBC Tier 1 RBC
Leverage Ratio
Supplementary Leverage Ratio
%
≥ 10
≥ 8 ≥ 6 < 6 < 4
≥ 6.5 ≥ 4.5 < 4.5
≥ 5 ≥ 4 < 4 < 3
N/A
Well Capitalized
≥ 8 < 8 < 6
≥ 3 < 3
Adequately Capitalized
Undercapitalized
< 3
N/A
Significantly Undercapitalized Critically Undercapitalized
N/A
Tangible Equity (defined as Tier 1 Capital plus non Tier 1 perpetual Preferred stock) to Total Assets ≤ 2
Internal Use Only
Prompt Corrective Action (PCA) Capital Categories 1. Well capitalized 2. Adequately capitalized 3. Undercapitalized 4. Significantly undercapitalized 5. Critically undercapitalized
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