Question: 2a) Examine the exhibit below and explain using the return on equity equation the information presented in the graphs. Detail any simplifying assumptions that assist

2a) Examine the exhibit below and explain using the return on equity equation the information presented in the graphs. Detail any simplifying assumptions that assist in your explanation.

The COVID-19 pandemic's impact on banking profitability and capital has been mild compared with that of the 2007-10 financial crisis. Comparison of ROE and Tier-1 ratios, global banks, 2007-10 and 2019-22 (estimated), % Return on equity Tier-1 ratio Financial crisis 16 16 2007 2010 14 14 12 COVID-19 pandemic 10 12 2019 2022E 8 10 6 4 8 Estimated. Source: S&P Global; Panorama by Mckinsey

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