Portuguese banks could be next to get DTA 'benefit'

By Owen Sanderson
24 Apr 2014

Portuguese regulators could be next in line to allow banks to increase their capital ratios using deferred tax assets, following similar moves in Spain and Italy that have boosted headline Basel III capital ratios at local banks.

But using deferred tax assets (DTAs) to boost capital is deeply controversial, since they can only be counted as capital if the bank is profitable in the future. DTAs do not absorb losses in the same way as cash or common equity — they are just agreements that ...

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