Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
  1. Home
  2. Search

Refine search

Refine search

Access:
Content type:
Publication date:
Apply   From and To filters
Subject: Show more
Journals Show more
Publishers: Show more
Societies Show more
Series: Show more
Collections: Show more

Actions for selected content:

Select all | Deselect all
  • View selected items
  • Export citations
  • Download PDF (zip)
  • Save to Kindle
  • Save to Dropbox
  • Save to Google Drive

Save Search

You can save your searches here and later view and run them again in "My saved searches".

Please provide a title, maximum of 40 characters.
Cancel
×

1 results

  • 2 - Capital Ratios in the Long Run

  • Simon Amrein, Lucerne School of Business, Switzerland
  • Book:
    Capital in Banking
    Published online:
    09 December 2024
    Print publication:
    23 January 2025, pp 18-40
    • Chapter
      • You have access
      • Open access
    • PDF
    • HTML
    • Export citation

  • Summary

    A new data set shows the evolution of capital ratios for the United States, the United Kingdom, Switzerland, and Germany. The chapter questions the accuracy of capital/assets ratios and argues that cross-country comparisons of capital ratios are of little explanatory value without a historical narrative. Firstly, the capital/assets ratios used by the academic literature usually consider paid-up capital and disclosed reserves only. However, the total liability of shareholders can go beyond the paid-up capital (double or unlimited liability), which influences the level of capital/assets ratios. Secondly, accounting standards allowed the extensive build-up of hidden reserves in the United Kingdom and Switzerland. The chapter shows that the capital strength of banks, considering hidden reserves and shareholder liabilities, is underestimated. Existing publications comparing capital/assets ratios on an international level neglect such issues. Additionally, the chapter analyses structural changes in the assets of British, Swiss, and US banks using the Basel I framework of 1988 for a historical simulation.