Capital, Liquidity, and Organization
|Global Excess Liquidity Sources|
|Time to Required Funding|
(1) Basel 1 includes the Market Risk Final Rule at September 30, 2013.
(2) Basel 3 (fully phased-in) estimates as of September 30, 2013 are based on the Advanced Approach under the final Basel 3 rules issued on July 2, 2013. The Basel 3 Tier 1 common capital ratio is a non-GAAP financial measure. For reconciliation to GAAP financial measures, please see the supplemental third quarter 2013 financial information on the Presentations page.
(3) The Tier 1 common capital ratio is determined by dividing Tier 1 common capital by risk weighted assets.
(4) The Tier 1 capital ratio is determined by dividing Tier 1 capital by risk weighted assets.
(5) The total capital ratio is determined by dividing total capital by risk weighted assets.
(6) The leverage ratio is determined by dividing Tier 1 capital by adjusted quarterly average total assets, after certain adjustments.
Global Excess Liquidity Sources
Bank of America maintains excess liquidity available to the parent company and selected subsidiaries in the form of cash and high-quality, liquid, unencumbered securities that together serve as our primary means of liquidity risk mitigation. We call these assets our "Global Excess Liquidity Sources," and we limit the composition of high-quality, liquid, unencumbered securities to U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities and a select group of non-U.S. government securities. We believe we can quickly obtain cash for these securities, even in stressed market conditions, through repurchase agreements or outright sales. We hold these assets in entities that allow us to meet the liquidity requirements of our global businesses and we consider the impact of potential regulatory, tax, legal and other restrictions that could limit the transferability of funds among entities. Our Global Excess Liquidity Sources totaled $359 billion at September 30, 2013 and were maintained as presented in the graph below.
Time to Required Funding
One metric Bank of America Corporation uses to evaluate the appropriate level of excess liquidity at the parent company is "Time to Required Funding." This debt coverage measure indicates the number of months that the parent company can continue to meet its unsecured contractual obligations as they come due using only its Global Excess Liquidity Sources, without issuing any new debt or accessing any additional liquidity sources. The established target for Time to Required Funding has been set at 21 months. As of September 30, 2013, Time to Required Funding stood at 35 months. The period-end Time to Required Funding by quarter is depicted in the chart below.
An organizational chart depicting select major operating subsidiaries of Bank of America Corporation can be found by clicking here.