Capital requirements

Capital requirements

Financing required for the operation of a business, composed of long-term and working capital plus fixed assets.

Capital Requirements

In banking regulation, the amount of money a bank must have available to cover withdrawals, closed accounts, and other account-related expenses. While each jurisdiction computes capital requirements differently, Basel II provides a framework many countries follow; it describes capital requirements as a percentage of a bank's risk-weighted assets. Capital requirements are important for bank solvency, and, in difficult times, reduce the pressure for bank runs.
References in periodicals archive ?
The aggregate S2 solvency capital requirements (SCR) coverage ratio was 220% at end-2016.
The apex bank has set the deadline for all insurance companies to comply with its new capital requirements.
This draft advisory provides a new standard framework for determining the capital requirements for residential mortgage insurance companies.
These new capital requirements would be applied in a phased manner and the existing insurance companies would be allowed a period of two years, i.
Dubai: Basel III capital requirements present an opportunity for Middle East banks and regulators to embrace new rules and improve the sector's asset quality and risk-return profiles, according to a study by management consultancy Strategy&, formerly Booz & Company.
regulators increase capital requirements for financial companies deemed to be systemic.
Under proposed global banking rules known as Basel III, regulators will vary banks' capital requirements over time to try to smooth the credit cycle.
That is, the capital requirements have a procyclical effect on lending.
The revision in outlook follows the deterioration in the Vimal groupA[cent sign]a'[not sign]a"[cent sign]s debt-protection metrics, because of a sharp decline in its operating margin and increase in its working capital requirements in fiscal 2009/10, ended on 31 March 2010.
in March of 2007 the Commission for Banking Supervision (currently the Financial Supervision Commission), being in charge of the Polish banking system, obliged banks to apply the regulations of the Capital Requirements Directive, also known as Basel ii.
This new international bank regulatory framework is to be based on three 'pillars': risk-based capital requirements, discretionary supervisory discipline, and market discipline.
It requires reinsurers to be authorized by the member state in which the reinsurer has its head office and imposes certain capital requirements to ensure that assets are prudently invested, properly diversified and sufficiently liquid, having due regard to the amount and duration of the expected claims payments.

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