Constraints on capital – What’s holding your bank back?
Abstract: A struggling economy affects bank capital on both sides of the equation: It hurts earnings and it increases risk. But this article shows that downgraded securities, deferred tax assets, and new rules requiring certain assets to be reflected on balance sheets can have a direct impact on bank capital levels. The article also discusses new proposals that would significantly impact bank capital requirements. And a sidebar explains why the SEC might regard a small community bank as public even if it never makes a public stock offering.