Blog
Banking Analytics: Understanding Credit Risk with the Texas Ratio
Abstract: Developed in the 1980s during the Texas banking crisis, the Texas ratio offers an indicator of a bank’s health by measuring the institution’s troubled loans against its capital resources to absorb losses.
Access Documents
File(s):
File format is text/html
https://www.stlouisfed.org/on-the-economy/2025/nov/banking-analytics-taking-banks-risk-temperature-texas-ratio
Description: Full text
Authors
Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Source: On the Economy
Publication Date: 2025-11-04
Note: This series is part of ongoing work by the Supervisory Policy and Risk Analysis team to highlight key banking metrics in monitoring the health of the banking system, a function of the St. Louis Fed’s Supervision, Credit and Learning Division.