Newsletter December 09: S&P capital ratio shows big banks weaker than thought

PARIS – The first real global comparison of banks’ risk-adjusted capital adequacy, as measured by credit rating agency Standard and Poor’s new risk-adjusted capital (RAC) ratio, shows an average level of 6.7% for 45 major banks, at June 30. This was more than three percentage points lower than the average for their Tier 1 ratios, as more typically measured, suggesting that the banking systemic is weaker than generally perceived.