Capital Adequacy Ratio


Also found in: Acronyms, Wikipedia.

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 ?
We could affirm the ratings if we see that the bank receives sufficient capital support, restoring capital adequacy ratios to substantially above the minimum required levels, and if the risks of noncompliance with regulatory requirements subside, while the bank's liquidity position remains stable," said the report.
This reported capital adequacy ratio excluding the minority interest was 12.
During the year ADCB's capital and liquidity remained strong with capital adequacy ratio of 21.
Currently the capital adequacy ratio of domestic banks averages 11.
The head of the banking regulator, Liu Mingkang, opined that it is 'best' for systemically important banks to have a 12 per cent capital adequacy ratio by the end of 2013.
The Japanese government will not allow a JGB credit rating by any credit-rating agency to affect the calculation formula for Japanese banks' capital adequacy ratios by padding the totals of their risk assets.
Norms require banks in China to maintain a capital adequacy ratio of 11.
The average BIS capital adequacy ratio of domestic banks at the end of September 2006 edged up 0.
Since the BOJ deems the 8 percent line the lower limit for its appropriate capital adequacy ratio level, it is considering taking measures to push up the capital adequacy ratio above the line.
A capital adequacy ratio is a major gauge of a bank's financial health.
The acquisition of Max Matthiessen will slightly decrease the capital adequacy ratio in the coming years.
The bank says that the subordinated loan from Vnesheconombank would help improve its capital adequacy ratio by at least 13%, which is required to fulfill strategic plans.
Full browser ?