I posted this in the Prime thread, but it probably fits better here.
Royal Bank has announced a new stock offering in an attempt to increase liquidity.
http://www.financialpost.com/story.html?id=1050259
Quote:
RBC's "Tier 1 ratio" was about nine per cent, and "it seems like the market wants more," said Ohad Lederer, an analyst at Veritas Investment Research in Toronto. The RBC share issue could herald similar fundraising by a couple of other banks, Mr. Lederer said.
RBC said its Tier 1 capital ratio would rise to 9.9 per cent with the issue, or would rise to 10.1 per cent if the underwriters exercise the over-allotment option. The minimum Tier 1 capital ratio in Canada is seven per cent, but the big domestic banks range from 9.1 to 10.5 per cent.
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The big banks complained about the ratios when the markets were hot, but they are in better shape because of them now.
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