PNC CEO Says Banks Could Face Tier 1 Capital Standard Of 9%
September 15 2009 - 11:27AM
Dow Jones News
Regulators may eventually require banks to maintain a Tier 1
capital ratio of 9%, according to the chief executive of PNC
Financial Services Group Inc. (PNC)
"It appears as if nine might be a more acceptable level," James
Rohr said Tuesday in New York at a Barclays Financial Services
conference. Tier 1 capital ratios are a key measure of banks'
financial health and regulators have historically required banks to
maintain a Tier 1 ratio of 6% in order to be considered "well
capitalized."
More recently, regulators have informally pushed banks to raise
their ratios to 8%. But Rohr's comments suggest those standards may
soon rise more.
Finance officials from twenty industrialized nations will soon
gather in Pittsburgh and observers expect the group to address
regulation of banks.
In addition, Rohr said PNC's charge for current and future loan
losses in the third quarter will be equivalent to the bank's
provision in the third quarter. Rohr said that charge will add to
the bank's reserve for future loan losses, meaning it will exceed
the bank's third-quarter charge-offs.
-By Marshall Eckblad, Dow Jones Newswires; 212-416-2156;
marshall.eckblad@dowjones.com