The Role of Asset Level Management in Capital Planning

Capital planning has long been a survive-and-thrive strategy, but the practice has recently taken on new considerations. Regulatory initiatives for the past 24 months have moved capital requirements higher for many financial institutions.

In fact, requirements of 8% and 12% for tier 1 and risk-based capital are not uncommon. In many cases, the increased requirements arise from an above-average level of classified assets to equity found in an examination.