- 20 Marks
RM – JUL 2020 – L4 – Q1 – Capital Inadequacy and Measures to Bolster CAR
Discuss measures a bank can take to improve a declining Capital Adequacy Ratio to prevent insolvency or sanctions, referencing recent Ghanaian bank collapses.
Question
Capital inadequacy (low or negative Capital Adequacy Ratio, below 10%) featured prominently in the financials culminating into the recent collapse of some banks in Ghana.
What measures may a bank take to bolster its declining ratio to avoid insolvency or regulatory sanctions?
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