Quote Originally Posted by Snoopy View Post
I see your point Grunter, but I do not agree with your conclusion. IMO a higher gearing ratio always means more risk for any specific company.
Here is a paper that you may be interested in that demonstrates that there is no relationship between the gearing ratio and the risk of default in a bank.

http://www.szgerzensee.ch/fileadmin/...rs/wp-0204.pdf