nottheaverageactuary

Actuarial news and views from Cape Town and beyond

The Capital Management of European Banks (McKinsey 2012)

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McKinsey has written a paper that presents the results of a survey on the leading practices in capital management of European banks (download the paper here).

The paper discusses the unwanted complexities of various capital metrics, how capital and risk-weighted assets can be optimised to create opportunities, capital-focused strategies, and the unexplored areas of capital management and resource allocation.

The paper also analyses the pros and cons of some going-concern capital models, what factors are important in ensuring a successful reduction capital wastage, and a new capital-efficient business model.

I know we are probably more interested in the capital management of insurance companies, but it is an enlightening read nonetheless.

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