Banks immune to collapse

[Troy McClure]

I was reading how some economists believe that Europe can only get better if there is huge debt writedowns and some of Europes banks are allowed to fail to purge the system. As much as politians are trying to save the Euro that this is the elephant in the room and nothing will be fixed without it.
If this were to be the case what banks are not mired in debt? in the eurozone or outside of it or anywhere. Starting in Europe and also looking worldwide what banks are strong enough not to be effected by such a senario.?

 

[Jim2007]

Well T1 ratios are one of the best indication of a banks ability to stand up the a major hit, for example UBS had a T1 of about 16% when it was forced to write off 2.5b in the last few months over the rogue trader in the UK.

If you visit the European Banking Authority website you'll find calculations of the T1 ratios for banks they reviewed during the last stress test.

 

[Troy McClure]

Hi Jim
So what does that mean exactly. What should the TI of a bank ideally be then? and who are top of the class.