They are counted as part of banks' capital, and prudential regulations often require pension funds to hold a minimum share of their assets in government securities.
Under the scheme, if a bank's capital falls below 8% of its risk assets, the recommended minimum for institutions doing business abroad, the state would either lend money to it, buy its shares - or nationalize it.
If Mr. Market trashes your investments in a sudden panic, your margin debts may be "called, " forcing you to sell some of your assets to sustain the minimum account values you committed to under the terms of the loan.
There was no minimum threshold for the dollar amount of invested assets required to participate.
Financial regulators and central bank governors from the world's biggest economies have made history by agreeing rules on the minimum quantities of cash and liquid or sellable assets that all banks must hold.
Along with five others, they had been forced to draw up restructuring plans after falling short of the 8% ratio of capital to risk-weighted assets that is considered the acceptable minimum by international financial regulators (by more than six percentage points in the case of Commercial Bank of Korea).
So banks have an incentive to keep to a minimum their ratios of capital to loans (or assets).
There is an oddity at the heart of today's historic agreement by the oversight body of the Basel Committee on Banking Supervision, which for the first time will impose new minimum requirements for the amount of cash and liquid assets that banks all over the world will have to hold.
Basel II left the minimum capital requirements at 8% of risk-weighted assets.
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They have to hold a minimum total capital of 8% of risk-weighted assets - that is, capital held to back the loans that they make.
Because they have counted this as a cost, they say that minimum capital requirements should be calculated on the basis of credit-card assets net of expected losses.
Your minimum distributions are calculated according to your own life expectancy, and the assets can continue to grow tax-free, so that they may become part of your own inheritance.
Earnings on Roth IRA assets are tax-free if qualified, and there is no required minimum distribution (RMD) amounts.
The Bank of England wants its ECTR - which provides relatively cheap loans, at a minimum interest rate of 0.75%, in return for pretty much any old assets or collateral the banks can provide - to be seen as mainstream funding, not stigmatised emergency funding.
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Since the new Europe-wide rule to strengthen banks is that they must - by the middle of 2012 - have a minimum of 9% capital on a Basel 2.5 basis relative to their risk-weighted assets, after allowing for the fall in the price of their holdings of the debts of over-indebted eurozone countries, by definition it is the banks in those over-indebted eurozone countries that emerge as weakest.
He refused to be drawn on what the final outcome would be, but he did not deny that expectations of banks such as HSBC that they'll be forced to hold what's known as core tier one capital equivalent to around 10% of risk-weighted assets are in the right ballpark - or about 3 percentage points more than the new 7% minimum for all banks.
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