Capital requirements

(redirected from Capital requirement)
Also found in: Wikipedia.

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 ?
There are three objectives of a higher capital requirement.
31, 1991, the bank met the tangible capital requirement of 1.
However, the primary supervisory emphasis has shifted to the risk-based capital requirement.
Prior to the restatement, the bank, on a pro forma basis as of that date, was not in compliance with the risk-based capital requirement.
cause the bank to fall below its risk-based capital requirement although
Islamabad -- The Securities and Exchange Commission of Pakistan (SECP), with the approval of its Policy Board, has increased the minimum paid up capital requirement for insurance companies.
Based on 2012 performance, 15 of the 64 banks could fail to meet a capital requirement of 16 per cent, and 29 of the banks could fail to meet a capital requirement of 18 per cent," said Mazen Najjar, a Partner with Booz & Company.
The solvency level of a given capital requirement depends critically on the period over which it is calibrated and on assumptions of the state of the world going forward.
If they cannot do that, they must merge to reach the new capital requirement.
determine the external capital requirement (solvency) of the Group in
OFHEO has determined that Fannie Mae's minimum capital requirement was $24.

Full browser ?