LETTER OF TRANSMITTAL
This report¡¦s topic is Trends in Australian Bank Capital. The content is as following:
1. The explanation of why ¡§Regulators usually want more equity capital whereas shareholders usually favour less equity capital¡¨
2. The differences between bank equity capital and bank regulatory capital
3. A discussion of the functions of bank capital and the role of the risk-return trade-off
4. The differences between tier 1 and tier 2 capital
5. The components of tier 1 and tier 2 capital and the cost and risk implications of them
6. Details of the trends in the four major Australian banks for the last five years.
1.
In Hogan et al (2004) Page 249 states that ¡§from the shareholders¡¦ point of view, the appropriate amount of capital is an amount that is small enough to produce at least an adequate return on capital and yet is large enough to absorb risk.¡¨ However, bank regulators have the responsibility of protecting depositors¡¦ funds and......
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Approximate Word Count: 2227
Approximate Pages: 9 (260 words per double-spaced page) |