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19-634: Broadway Bank may refer to: Broadway Bank (Illinois) , a defunct bank founded by the Giannoulias family and closed by the FDIC in 2010 with its assets transferred to MB Financial Bank Broadway Bank (Texas) , a San Antonio bank founded in 1942, also controlling Eisenhower Bank, and still operating Broadway Bank and Trust Company , a California bank bought by Orra E. Monnette in 1911 and absorbed into what became Bank of America Broadway Bank of Brooklyn ,

38-415: A {\displaystyle \,a} ) or the respective national regulator's minimum total capital requirement. If using risk weighted assets , CAR = T 1 + T 2 a {\displaystyle {\mbox{CAR}}={\cfrac {T_{1}+T_{2}}{a}}} ≥ 10%. The percent threshold varies from bank to bank (10% in this case,

57-447: A 0% risk weighting, and residential mortgage loans have a 50% risk weighting. All other types of assets (loans to customers) have a 100% risk weighting. Bank "A" has assets totaling 100 units, consisting of: Bank "A" has debt of 95 units, all of which are deposits. By definition, equity is equal to assets minus debt, or 5 units. Bank A's risk-weighted assets are calculated as follows Even though Bank A would appear to have

76-532: A New York bank absorbed into Manufacturers Trust Company in the early 20th century Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with the title Broadway Bank . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=Broadway_Bank&oldid=358074281 " Category : Disambiguation pages Hidden categories: Short description

95-526: A common requirement for regulators conforming to the Basel Accords ) and is set by the national banking regulator of different countries. Two types of capital are measured: tier one capital ( T 1 {\displaystyle T_{1}} above), which can absorb losses without a bank being required to cease trading, and tier two capital ( T 2 {\displaystyle T_{2}} above), which can absorb losses in

114-493: A cost of $ 394.3 million to the federal Deposit Insurance Fund . Broadway Bank was one of seven Illinois banks that were closed on the same day; the others were Chicago banks Citizens Bank & Trust Co., Lincoln Park Savings Bank, and New Century Bank; Amcore Bank in Rockford ; and Peotone Bank and Trust Co. Capital ratio Capital Adequacy Ratio ( CAR ) also known as Capital to Risk (Weighted) Assets Ratio ( CRAR ),

133-470: A debt-to-equity ratio of 95:5, or equity-to-assets of only 5%, its CAR is substantially higher. It is considered less risky because some of its assets are less risky than others. The Basel rules recognize that different types of equity are more important than others. To recognize this, different adjustments are made: Different minimum CARs are applied. For example, the minimum Tier I equity allowed by statute for risk -weighted assets may be 6%, while

152-458: Is different from Wikidata All article disambiguation pages All disambiguation pages Broadway Bank (Illinois) It was founded in 1979  ( 1979 ) by Alexis Giannoulias , a Greek immigrant. His sons, Demetris Giannoulias and Alexi Giannoulias , were also heavily involved in the bank. Demetris eventually became a senior officer, and Alexi was a vice president and senior loan officer from 2002 to 2006. By 2010, Demetris

171-467: Is the ratio of a bank 's capital to its risk . National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements . It is a measure of a bank's capital. It is expressed as a percentage of a bank's risk-weighted credit exposures. The enforcement of regulated levels of this ratio is intended to protect depositors and promote stability and efficiency of financial systems around

190-456: The Basel Accords . In the most basic application, government debt is allowed a 0% "risk weighting" - that is, they are subtracted from total assets for purposes of calculating the CAR. Risk weighted assets - Fund Based  : Risk weighted assets mean fund based assets such as cash, loans, investments and other assets. Degrees of credit risk expressed as percentage weights have been assigned by

209-531: The 1970s. In 2006, her son sued the bank, claiming that she had dementia ; the bank won the suit in Cook County court in 2008 but, as of December 2009 , the case was being pursued by the son in appellate court. Among people with bank accounts at Broadway were Barack Obama , Illinois Secretary of State Jesse White , and Chicago alderman Walter Burnett, Jr. In 2006, Broadway Bank was considered very successful, and less than 0.5% of its loan portfolio

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228-564: The Giannoulias family without regulatory approval, hiring outsiders to evaluate the senior management, adding $ 19 million to its reserves, raising another $ 50 million within 90 days to achieve its promised capital ratio , and adopting a less risky investment strategy. CFO Kaushik Pancholi, noting that Broadway has previously "been one of the most profitable banks in Illinois", noted "certain investments that were rated triple-A by rating agencies when purchased, but have lost significant value over

247-723: The banking system. CAR is similar to leverage ; in the most basic formulation, it is comparable to the inverse of debt -to- equity leverage formulations (although CAR uses equity over assets instead of debt-to-equity; since assets are by definition equal to debt plus equity, a transformation is required). Unlike traditional leverage, however, CAR recognizes that assets can have different levels of risk . Since different types of assets have different risk profiles , CAR primarily adjusts for assets that are less risky by allowing banks to "discount" lower-risk assets. The specifics of CAR calculation vary from country to country, but general approaches tend to be similar for countries that apply

266-514: The event of a winding-up and so provides a lesser degree of protection to depositors. Capital adequacy ratio is the ratio which determines the bank's capacity to meet the time liabilities and other risks such as credit risk, operational risk etc. In the most simple formulation, a bank's capital is the "cushion" for potential losses, and protects the bank's depositors and other lenders. Banking regulators in most countries define and monitor CAR to protect depositors, thereby maintaining confidence in

285-502: The national regulator to each such assets. Non-funded (Off-Balance sheet) Items  : The credit risk exposure attached to off-balance sheet items has to be first calculated by multiplying the face amount of each of the off-balance sheet items by the Credit Conversion Factor . This will then have to be again multiplied by the relevant weightage. Local regulations establish that cash and government bonds have

304-650: The past year." At the end of business on Friday, April 23, 2010  ( 2010-04-23 ) , the Illinois Department of Financial and Professional Regulation , Division of Banking, seized Broadway Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver . The FDIC in turn named MB Financial Bank as the institution receiving Broadway Bank's deposit accounts. The FDIC announced that it and MB Financial Bank would share $ 878.4 million in losses, for

323-856: The world. Two types of capital are measured: Capital adequacy ratios (CARs) are a measure of the amount of a bank's core capital expressed as a percentage of its risk-weighted asset . Capital adequacy ratio is defined as: CAR = Tier 1 capital + Tier 2 capital Risk weighted assets {\displaystyle {\mbox{CAR}}={\cfrac {\mbox{Tier 1 capital + Tier 2 capital}}{\mbox{Risk weighted assets}}}} TIER 1 CAPITAL = (paid up capital + statutory reserves + disclosed free reserves) - (equity investments in subsidiary + intangible assets + current & brought-forward losses) TIER 2 CAPITAL = A) Undisclosed Reserves + B) General Loss reserves + C) hybrid debt capital instruments and subordinated debts where Risk can either be weighted assets (

342-513: Was CEO . Its financial situation and history of questionable loans were a factor in the campaign of Alexi Giannoulias in the 2010 U.S. Senate election in Illinois . In 2002, Broadway Bank made a one million dollar loan to Loren Billings, using her building on West Washington Street in Chicago as collateral ; the building was both her home and the Museum of Holography , which she had founded in

361-545: Was 90 days overdue. Alexi Giannoulias left Broadway Bank in 2006 when he was elected Illinois State Treasurer . While state treasurer, he won the Democratic primary in the 2010 U.S. Senate election in Illinois , making him the Democratic candidate for Barack Obama's former U.S. Senate seat. By 2009, Broadway Bank had become burdened with bad loans. On January 26, 2010, the bank agreed to restrictions from state and federal banking regulators: ending dividend payments to

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