Do Bank Holding Companies I I Act as “ Sources of Strength ” for Their Bank Subsidiaries ?
نویسنده
چکیده
HOSE WHO WISH to determine why banks fail typically focus on the characteristics of banks and their local markets that make them vulnerable to losses.1 A key factor often overlooked, however, is capital injections by shareholders. A bank whose losses exceed its capital need not fail, if its shareholders (existing or new) inject sufficient additional funds to restore its capital ratio to a level acceptable to the bank’s supervisory agency. Likewise, the shareholders of a bank with a positive, but relatively low, capital ratio can always remove it from its “problem bank” status by injecting sufficient capital.
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