FRM: Bank Balance Sheet & Leverage Ratio

[@yordanosbiru1712]

Thank you for your simplified and clear explanation. Does this calculation applies to banks in Europe. I want to know if the same approach is used by Italian banks.

[@winniewu6784]

I have gone through many of your videos and am so impressed. I work in a banks's IT department but working with highligh complex types of business lines and risk mangement areas. You made all the concepts I have been struggling with so easily understood (amazing video on repo). One question though --- why are the derivatives consider part of the off balance sheet? I always accpted it as the fact but just curious.

[@makkala123]

I was under the impression that reserves were also part of tier2 capital. Is is not true?

[@djkhaled9027]

So basically MacDonough ratio is total capital / (total asset *risk multiplier)?

[@caribstarz]

In this case, how exactly is the RWA calculated? Because I couldn't get to see what value D19 was.

[@cesaraxl2523]

i realize I am kinda off topic but do anyone know a good website to watch newly released movies online?

[@cristianeaston4861]

@Cesar Axl flixportal xD

[@cesaraxl2523]

@Cristian Easton Thanks, I went there and it seems like they got a lot of movies there :) Appreciate it!!

[@cristianeaston4861]

@Cesar Axl Glad I could help =)

[@cindywong914]

Thank you very much. the explanation is very clear.

[@bionicturtle]

Mike Lam You're welcome! Thank you for watching!

[@bionicturtle]

@bionicturtledotcom ... and the liabilities i am showing are on-balance sheet, so your 6x doesn't apply to my stylized example anyway

[@williamhwangable]

Thank you for your explanation - nice and simple.

[@bionicturtle]

+William Hwang You're welcome! We are happy to hear that our video was so helpful! Thanks for watching!

[@bionicturtle]

@o266242 Thrilled to help, thanks for you kind words!

[@meliseliftunc1244]

thank you, I wish there was an excel attachment of the calculatıon in the video

[@bionicturtle]

@jeremyj2e the point is the *stylized* example is to emphasis that off-BS assets do contribute to RWA, not to size them realistically (obviously). I didn't drill down to intangibles (obviously). Liabilities at 6x equity is not misleading: it's a bank, they are leveraged. But thank you for the useless nitpicks

[@lizi9019]

it's tempting to treat provision or loan loss reserve as asset whereas it in fact is a way of absorbing a loss, a way of financing, just like equity. it's a form of capital. it's not a part of the assets of a bank.

[@Niiotoe1]

Its a 'liability' in the sense that it was deducted from the 'Gross Loans' figure...

[@lizi9019]

yes, thank you for the reply. I understand, whatever form it is in, as long as it's effectively a way of "financing", it should be accounted/treated as capital, just like equity.

[@TheElrubio1010]

@@lizi9019 Loans loss provisions are treated as Tier 2 cap

[@koco561]

This is so helpful. Thanks

[@NervousBuffalo83]

Are you sure you know what you're talking about?! 1. RWA cannot be more than 100% of assets - with cash and certain govies around 0%. 2. Your definition of Tier 1 Capital is kind of fishy - you need to back out goodwill. 3. Or are you talking about Tier 1 Common (seems like you use them interchangeably) - then back out preferred and goodwill, otherwise it's incorrect.

[@paola2144]

FYRMhater re 1 includes off-bs items as well

[@elvarg991]

It is pretty obvious he has no clue what he is talking about, b.s. from a-z so to speak.

[@FactsNReason]

here debt + loan = 400 ... not 550 ... am i missing something?

[@rupaalsingh4047]

Concise explanation

[@bionicturtle]

Thank you for watching!

[@KASPER5000]

The Fed Emergency Supplementary Leverage Ratio expiring sent me here

[@ano5505]

thanks for wonderful video regards anoop mohanty...

[@mjohncooper]

this is amazing, thank you so much. would you happen to have one for an insurance company? or maybe be willing to do one? :-0

[@iskanderbadshah]

this is great. thank you.

[@Nandan09]

nice video

[@adrock182]

EXCELLENT