Professional Documents
Culture Documents
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
15-2
Key Topics
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-3
Introduction
What is capital?
Funds contributed by the owners of a financial institution
Raising and retaining sufficient capital to protect the
interests of customers, employees, owners, and the
general public is tough
Why is capital so important in financial-services
management?
It provides a cushion of protection against risk and promotes
public confidence
Capital has become the centerpiece of supervision and
regulation today
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-4
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-5
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-6
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-7
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-8
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-9
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-10
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-11
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-12
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-15
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-16
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-17
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-18
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-19
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-20
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-22
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-23
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-24
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-29
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-30
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-31
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-34
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-36
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-37
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-38
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.
15-39
Quick Quiz
What crucial roles does capital play in the management and
viability of a financial firm?
What are the most important and least important forms of
capital held by U.S.-insured banks?
What is the rationale for having the government set capital
standards for financial institutions as opposed to letting the
private marketplace set those standards?
How is the Basel Agreement likely to affect a banks choices
among assets it would like to acquire?
What are the differences among Basel I, II, and III?
What are the principal sources of external capital for a financial
institution?
McGraw-Hill/Irwin
Bank Management and Financial 2008 The McGraw-Hill Companies, Inc., All Rights
Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
Reserved.