Word: ratio
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...determine leverage, Schulte divided U.S. banks' tangible assets (that is, assets, including loans, minus intangibles such as goodwill) by their tangible capital (the book value of capital minus intangibles). He got a ratio of 24.8. This is a worrying multiple: the leverage of U.S. banks in 1993, years before the start of the asset bubble whose excesses have now brought the world to its economic knees, was just 20. To bring leverage back to that pre-bubble level, Nomura estimates that U.S. banks need to either shed $2.8 trillion in tangible assets (by selling loan portfolios, subsidiaries and other holdings...
Europe's banks are in much worse shape, with a ratio of 40.5. They must either sell $9.7 trillion in assets or raise $485 billion in capital to bring leverage down to 20. The Royal Bank of Scotland (estimated leverage: 39.3) has already started slimming down. It recently put its retail and commercial businesses in Asia on the block. New CEO Stephen Hester has announced plans to create a subsidiary that will hold about $477 billion of the bank's assets that are earmarked for disposal...
...money to buy them? Nomura found that Asia's banks are significantly underleveraged, meaning they have plenty of muscle for acquisitions. China's leverage ratio is 15.8, Hong Kong's is 14.3, India's is 11.6, South Korea's is 16.7. Having gone through rehab after the 1997 Asian financial crisis, the region's financial institutions went into the current Great Recession with robust balance sheets that they can now leverage up by acquiring the assets that Western banks are shedding. China's banks are in a particularly sweet spot. Grown fat on years of sizzling GDP growth, Bank...
...ratios are becoming increasingly unbalanced in many parts of the world, especially in China and India (which account for 37 percent of the global population). The normal sex ratio at birth is roughly 106 males for every 100 females, but it may presently be as high as 120 for young people in China, or as high as 111 in India. This shift may arise from preferential abortion or the neglect of baby girls relative to boys. Gender imbalance may also have other determinants, such as large-scale migration of one or the other sex in search of work...
...estimates that the proportion of people aged 60 and over will double between 2000 and 2050, from 10 percent to 21 percent, and the proportion of children will drop from 30 percent to 21 percent. This change also has numerous implications, including for the “dependency ratio,” meaning that fewer young people are available to provide for the medical and economic needs of the elderly. Much less heralded, however, is the fact that war is a young person’s activity, and it is entirely likely that, as populations age, they may become less...