Stress Test: Tangible Common Equity, 3/31/09

"A recent Reuters report suggests TCE will be a critical metric for the bank stress tests: “U.S. regulators want the top 19 banks being stress-tested to have at least 3% tangible common equity.” In other words, regulators want banks to have a leverage ratio below 33x. (3¢ of TCE for each $1 of tangible assets = 33x leverage) So ahead of any official announcements regarding stress test parameters, OA thought we’d publish our latest update for banks’ TCE. (For a tutorial on TCE, go to this post and follow the links at the top.)"