Debt-service ratios are lower, and their liquidity ratio the ratio of short-term assets to liabilities is historically high.
In regards to leverage, Basel III introduced a minimum 3% leverage ratio and two required liquidity ratios: (1) the Liquidity Coverage Ratio, which requires a bank to hold high-quality liquid assets to cover its total net cash outflows over 30 days, and (2) the Net Stable Funding Ratio, which requires the available amount of stable funding to exceed the required amount of stable funding over a one-year period of extended stress.
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Resource shares supported the Sydney market, and the Australian dollar jumped briefly, after China's Xinhua news agency said the People's Bank of China would boost liquidity via its reserve requirement ratio.
Its current ratio, a measure of liquidity, is low, with current liabilities often bigger than current assets.
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The ECB also moved to ease liquidity for European banks by lowering the reserve ratio to 1% from 2%.
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Mr. Chidambaram's comments add support to the view among some investors and analysts that the central bank will also cut banks' cash reserve ratio to help banks tide over the liquidity crunch.
Debt is a bit high, and liquidity a tad low, as measured by a current ratio below 1.
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While the ability of some smaller banks to lend is restricted by the loan-to-deposit ratio regulations, sluggish credit expansion was not primarily a result of liquidity constraints, Barclays analysts said.
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"The reserve ratio rise is a signal that the central bank is still in liquidity tightening mode and is very keen to control loan growth, " said a trader at a European bank in Shanghai.
As the table below shows, these factors have enabled Nokia to maintain a healthy interest coverage ratio and quick ratio (nearly equal to the industry average), dispensing any immediate liquidity concerns.
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Liquidity for major non-financial corporations has never been better as measured by the high ratio of liquid assets to current liabilities.
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Tom Lydon, president of Global Trends Investments, says good ETFs have a reasonable expense ratio, a well-diversified underlying index and underlying stocks with lots of liquidity.
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