FDIC Vice Chairman Delivers Remarks Regarding the Global Capital Index

US FDIC Vice Chairman Thomas M. Hoenig delivered remarks regarding the semi-annual report of the Global Capital Index released that day.

Notably, equity capital ratios increased at most of the largest US banks over the past six months, and all reported higher price-to-book ratios with most now trading at a premium.  The International Financial Reporting Standards (IFRS) tangible leverage ratio for U.S. GSIBs was 6.28 percent at the end of 2016, up from 5.75 percent at mid-year 2016. Their average price-to-book ratio increased from a discount to book of 0.90 percent to a premium of 1.29 percent over the past six months. Vice Chairman Hoenig noted that overall, he is “encouraged that the loss-absorbing tangible capital ratios of the largest US banks are increasing, and it is important that this progress continue to a point where they reach requisite levels of tangible capital to effectively move the cost of downside risk from the public to the firms.”

View the Global Capital Index.