Capital Adequacy Ratio

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Capital Adequacy Ratio

A measure of a bank's ability to meet its obligations relative to its exposure to risk. The capital adequacy ratio exists to ensure that a bank is able to handle losses and fulfill its obligations to account holders without ceasing operations. It is calculated as:

CAR = ( Tier 1 Capital + Tier 2 Capital ) / Risk-weighted assets.
References in periodicals archive ?
Under the rules, all licensed funding agencies in the country will have to publicly announce their risk profile, risk management, capital adequacy, capital instruments and remuneration practices.
MANAMA: All licensed financial institutions in Bahrain will be required to publicly disclose their risk profile, risk management, capital adequacy, capital instruments and remuneration practices, under new rules by the Central Bank of Bahrain (CBB).
Manama : All licensed financial institutions in Bahrain will be required to publicly disclose their risk profile, risk management, capital adequacy, capital instruments and remuneration practices, under new rules by the Central Bank of Bahrain (CBB).
As per the rule, banks need to include their internal processes for evaluating capital adequacy, capital actions including common stock issuance, dividends and share repurchases along with premeditated capital actions over a nine-quarter planning horizon.
The ADB statement said market efficiency would be improved through the implementation of prudential standards covering risk-based capital adequacy, capital requirements, liquidity reserve requirements and loan loss provisioning.
The company's flagship product, ERisk Abacus, is the first complete, integrated enterprise risk management software solution designed to improve a bank's understanding of the link between risk and capital by providing crucial insights regarding capital adequacy, capital consumption, risk-adjusted profitability and shareholder value.
Abacus provides insights regarding capital adequacy, capital consumption, risk-adjusted profitability, and shareholder value.
The company's flagship product, ERisk Analytics, is the first complete, integrated enterprise risk management software solution designed to improve a bank's understanding of the link between risk and capital by providing crucial insights regarding capital adequacy, capital consumption, and risk-adjusted profitability.
Powered by advanced risk models, ERisk Analytics is the first complete, integrated enterprise risk management software solution designed to improve a bank's understanding of the link between risk and capital by providing crucial insights regarding capital adequacy, capital consumption, and risk-adjusted profitability.