Capital Adequacy Ratio: Asia vs. Europe vs. U.S. Banks

Asian banks in general have higher capital adequacy ratios than banks in Europe and the U.S. Large banks in Indonesia, Singapore and Taiwan have total capital adequacy ratios exceeding 15%.


Source: REGIONAL ECONOMIC OUTLOOK, Asia: Consolidating Recovery, Building Sustainable Growth,
IMFSurvey Magazine

Capital adequacy ratio(CAR) “is a ratio of a bank’s capital to its risk”. As Chinese banks continue to grow it is interesting to note that their CAR is lower than other Asian countries such as India, Japan, Korea, etc.Similarly the Core Tier 1 ratio of Chinese banks is also low.

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