CH 20 Commercial Banking Finance 150
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6 terms
Terms | Definitions |
|---|---|
 Functions of Capital | -to absorb unanticipated losses with enough margin to inspire confidence and enable the FI to continue as a going concern |
| FASB Statement No 115 | Requires securities classified as 'available for sale' to be marked to market. Regulators in 12/94 exempted banks |
| Book value of capital | Par value of shares + surplus value of shares + retained earnings + loan loss reserves |
| No change | Book value of capital and interest rate risk |
| Basel committee | Banking supervision established 1974 by G-10 |
| BV Arguments Against MV Accounting | -difficult to implement -Introduces excessive variability to Net Worth -Credit Crunch |
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