By mid-2009, years of unsustainable housing price appreciation had caused what in hindsight may be considered the biggest credit bubble in history. Banks are frequently caught up in the middle of financial debacles, and that specific crisis has been no exception. Therefore, it has become vitally important to differentiate between those who will succumb to the crisis and go bankrupt or become nationalized by the government from those that will survive and come out even stronger once conditions inevitably improve. An important measure is determining a bank’s capital adequacy ratios, with the Tier 1 capital ratio front and center as governments decide who needs rescuing and investors look to profit from an uneven environment.

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