Business Finance
MBA6163 Arkansas State University Capital Ratios for Money Center Banks HW

Question Description

I’m trying to study for my Management course and I need some help to understand this question.

Comparison of Capital Ratios for Money Center Banks, Regional Banks, and Community Banks.

You can find the list of U.S. Banks by assets size with the link below:

https://www.usbanklocations.com/bank-rank/total-assets.html

For this assignment, Money Center Banks are defined as banks with asset of $300,000,000,000 or greater. Regional Banks have assets of $10,000,000,000 to 50,000,000,000. Community Banks have assets of 1,000,000,000 or less.

Using S & P Global (SNL Financial)

Using SNL, find 5 Money Center Banks, 5 Regional Banks, 5 Community Banks.

Using Peer Analytics, Find Tier 1 to Risk Based Capital Ratio,

Discussion Questions

  1. What is the definition for the Tier 1 Risk Based Capital Ratio?
  2. What is the average for the Tier 1 Risk based Capital Ratio for the last quarter for the 5 Money Center Banks you chose, the 5 Regional Banks, and the 5 Community Banks?
  3. What is the trend of the Capital Ratio for each group of Banks?
  4. Do you see a difference in Capital that each group of Banks hold?
  5. Why are they different or similar?
  6. Why do Banks hold capital?

Unformatted Attachment Preview

Bank Management Homework Chapter 15 Comparison of Capital Ratios for Money Center Banks, Regional Banks, and Community Banks. You can find the list of U.S. Banks by assets size with the link below: https://www.usbanklocations.com/bank-rank/total-assets.html For this assignment, Money Center Banks are defined as banks with asset of $300,000,000,000 or greater. Regional Banks have assets of $10,000,000,000 to 50,000,000,000. Community Banks have assets of 1,000,000,000 or less. Using S & P Global (SNL Financial) Using SNL, find 5 Money Center Banks, 5 Regional Banks, 5 Community Banks. Using Peer Analytics, Find Tier 1 to Risk Based Capital Ratio, Click on Include Base Company Click on Company Look up Type in Company Name and click on Search Click on Bank of America NA then Apply Click on Run Analysis Click on Trend Chart for Tier 1 Common Capital RB Ratio Discussion Questions 1. What is the definition for the Tier 1 Risk Based Capital Ratio? 2. What is the average for the Tier 1 Risk based Capital Ratio for the last quarter for the 5 Money Center Banks you chose, the 5 Regional Banks, and the 5 Community Banks? 3. What is the trend of the Capital Ratio for each group of Banks? 4. Do you see a difference in Capital that each group of Banks hold? 5. Why are they different or similar? 6. Why do Banks hold capital? ...
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Final Answer

Attached.

Running head: BANK MANAGEMENT

1

Bank Management Homework
Name:
Course Number and Section:
Instructor:
Date:

BANK MANAGEMENT

2

COMPARISON OF CAPITAL RATIOS
Question 1
According to Kenton & Hayes (2019), Tier 1 risk-based capital ratio is the ratio of core
capital 1 tier of the bank in terms of equity capital and the disclosed reserves to its total risk of
weighted assets. It is the primary indicator for the bank's financial strength introduced in the
context of the third Basel accord as an agreement on the bank regulations. To protect themselves
from unforeseen losses, especially those relating to the financial crisis, banks must keep their
Tier 1 capital ratio above the provided threshold.
Question 2
The five Money Center Banks that I selected are JPMo...

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