Word: commonness
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...little deeper, though, and Citi's stress-test results look more like an F than the B+ the bank seemed to get. Among the 19 banks the government probed, Citi was found to have the lowest common capital ratio, which the government said was a key measure to protect against insolvency. What's more, Citi also got credit for a capital conversion it has yet to complete. Strip that out, and the amount of capital Citi needs balloons to nearly $63 billion, more than any of the other banks tested. (See pictures of the dangers of printing money...
...stress tests, the government said it decided to emphasize common capital because that was the measure that ultimately leads to "lowering the risk of insolvency." Citi's common capital ratio, at just 2.3%, was closer to zero than any other of the banks the government looked at. State Street's ratio at 15.5%, which was the highest of the banks, was nearly seven times greater than Citi's. Fourteen of the banks the government examined had a common capital ratio above 5%. The next lowest ratio to Citi was Wells Fargo, which had a common capital ratio...
...tests, other banks have announced plans or have been able to quickly complete capital-raising deals. Yet, unlike Citi and BofA, none of these planned actions were included in their stress-test results. Citi's results also downplayed the damage to shareholders that will result from restoring Citi's common capital ratios. In order to put Citi back on its feet, the company's shareholders will be diluted more than any other public bank that was part of the stress test. When Citi completes its conversion of preferred shares to boost its common equity, current Citi shareholders will...
...What the companies do have in common is a willingness to take risks, probably risks with long odds in order to launch new products. These products may be failures, but they are well enough researched and designed that they have a good chance of keeping IBM and Google ahead of the competition even if that does not immediately involve significant new revenue...
...More emphasis on prevention and wellness: Pure common sense tells you that it's much cheaper not to get sick in the first place. But there is little financial incentive for the health-care industry in that regard. Obama says he intends to change that. Here, however, some employers are taking the lead. As Obama noted after his meeting with the business executives: "When you hear what Safeway or Johnson & Johnson or any of these other companies have done, what you've seen is sustained experimentation over many years and a shift in incentive structures so that employees see concrete...