RBS Messed Up But It's Okay

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RBS’s full-year 2016 capital ratio under the European Banking Authority’s “Adverse Scenario” is 5.7% versus 6.7% previously reported—meaning the bank just hurdled the minimum 5.5% pass rate. The EBA organized the stress tests, which were aimed to help restore confidence in bank balance sheets. RBS said it erroneously considered around billions of pounds of deferred tax assets as top quality capital. After comparing with other U.K. banks it realized its error and restated the calculation. [WSJ]

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