Quarterly CET1 ratio of U.S. banking industry 2003-2022
The CET1 ratio of the US commercial banking industry only grew slightly in the third quarter of 2022, reversing a decline that started in 2021. The sharpest decrease was seen in 2007, which was caused by the global financial crisis. Another decrease took place in 2019, due to the COVID-19 pandemic, and then another one in 2021 and 2022. Nevertheless, while the recent decreasing trend may be similar to past trends, recent drops in the CET1 ratio were less drastic than that of 2007. Common equity tier 1 (CET1) is a capital measure that compares a bank's capital against its assets to determine whether the bank could stand a crisis. It was introduced as a part of Basel III, a set of international standards following the 2007-2008 financial crisis.
