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Wednesday, August 26, 2009

Almost 1/3 of Banks Rated F

Chris Whalen (via The Big Picture) provides an update of Institutional Risk Analytics latest bank stress test results. Before we dive in, here is a breakdown of what defines an A+ and an F bank (a full description of all ratings can be found here):

  • A+ Overall: Banks with this grade tend to exhibit strong metrics across the board
  • F: At this degree of stress, one or more of the key elements of the business model has reached failure mode. What concerns exist are probably already public

That comes out to 1.6 A+ banks for every F bank, up from 11:1 just three years back.

Source: The Big Picture