Equity distribution ratio of number of countries represented

First, capital requirements should be set as a straightforward ratio of common equity to total assets, thereby abandoning all reference to banks own risk management models.

Banks often oppose higher equity asset ratios, because equity capital is more expensive than debt capital. But this is precisely because of the lemon effect.

While normal banks need an equity asset ratio of at least 7 , investment banks typically operated on a ratio of only 4 .

That said, the ratio of capital formation does require careful monitoring.

The equity capital of banks urgently needs to be substantially increased.

Higher equity capital requirements, for example, require banks to fund themselves with relatively more equity and relatively less debt.

This capital is typically provided through equity flotation on securities markets and through venture capital firms and DFIs.

Spanish banks have 7 equity capital on average on their balance sheets.

. According to the report, the South African economy has shown a steady increase in the capital to labour ratio, in particular between 1960 and 1985, and a high capital to output ratio.

And equity capital requirements for large, systemically important financial institutions remain too low.

To comply with the capital adequacy ratio required by the Bank for International Settlements, most banks in the ESCWA region, especially in the GCC countries, raised their paid in capital, either by resorting to financial reserves or issuing and placing equity shares in the domestic market.

Meanwhile, the ECB has announced that it will have to double its equity capital.

Typically there is an even greater shortage of venture and equity capital for new enterprises.

Under an international agreement known as Basel III, banks are to be required to hold a higher ratio of equity capital against risk weighted assets, and leverage is to be limited to a smaller percentage of such assets.

Equity capital will increase relative to assets but, under current policies, it will increase because banks reduce their assets, not because they raise capital.

55. For firms over a certain size, sources of external equity and venture capital are critical.

Nevertheless, private equity continues to be a large and active asset class and the private equity firms, with hundreds of billions of dollars of committed capital from investors are looking to deploy capital in new and different transactions.

This form of financing is often used by private equity investors to reduce the amount of equity capital required to finance a leveraged buyout or major expansion.

Rather, the banking system is at the brink of insolvency, with a permanent loss in equity capital.

This would be the case as long as the banks losses remained smaller than their equity capital.

(d) Strengthen local capital markets, including new or expanded stock exchanges and specialized financial institutions, providing equity and loan capital to small and medium size enterprises

The advantage of equity capital is that it is loss absorbing, meaning that only after losses wipe out all of the equity do they need to be apportioned between creditors.

This is reflected in the current investment ratio for real capital assets of 43 of GDP, compared to 4.3 investment in human capital in the form of education.

Also driving China s high investment rate is the declining efficiency of investment capital, reflected in China s high incremental capital output ratio (annual investment divided by annual output growth).

Overall, the rapid decline in the savings ratio was exacerbated by the increasing dearth of capital inflows to Africa.

Under Chapter 11, companies with a solid underlying business generally swap debt for equity. Old equity holders are wiped out and old debt claims are transformed into equity claims in the new entity which continues operating with a new capital structure.

This is why equity capital held by financial institutions typically is more than twice as expensive as debt capital and why these institutions try to minimize its use.

This dataset takes account of only the approved equity capital for projects in production and under implementation, not actual, and does not cover reinvested earnings and other capital.

Lack of equity capital, in turn, made risk averse shareholders hire gamblers to manage their limited liability investment companies.

Other headlines that have recently reached South Africa were Bain Capital and KKR, the big boys of private equity.

During that year, the ratio was one doctor to 460 inhabitants in Nouméa and one to 2,097 outside the capital.

Higher and pro cyclical equity capital requirements on banks, combined with a requirement to raise contingent long term debt debt that converts into equity in a crisis is a better way forward.

Because of the capital utilization effect, the capital labor ratio would not, in fact, decline, and hence there would be no significant effect on the marginal productivity of hours worked.

A measure of the scant effectiveness of Albania apos s capital stock is provided by comparing the inverse of the marginal capital output ratio (MCOR) with that of the LDCs.

Where realistic debt restructuring scenarios indicate capital shortfalls, across the board conversion of bank debt into equity will be necessary.

Instead, they should become partners of private shareholders, endowing the banks temporarily with new equity capital until the crisis is over.

Loan or bond covenants often require borrowers to agree to maintain a minimum level of equity capital or cash on hand.

Second, with banks losing substantial amounts of equity capital estimates now reach 300 billion and more the need to maintain minimum equity debt ratios will force them to curtail business lending, hindering investment demand.

Ratio

That same ratio or use that same ratio

Investment banks like Bear Stearns and Lehman Brothers got into trouble because they had too little equity capital far less than 10 .

He also has invested in non traditional asset classes, including real estate, oil, timber, private equity, and venture capital and buyout firms.

These risks are already exacerbating the economic slowdown equity markets are falling everywhere, leading to negative wealth effects on consumption and capital spending.

They will continue to deprive the banking system of its equity capital, with little chance of it being recouped in the near future.