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Capital Requirements

   Also found in: Wikipedia 0.01 sec.
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.


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Bernanke said the Fed would step up efforts to review bank capital requirements to avoid a recurrence of the credit crisis that has spread around the world.
Bernanke said the Fed would step up efforts to review bank capital requirements to avoid a recurrence of the credit crisis that has spread around the world.
Put simply, identifying higher than expected working capital requirements gives the purchaser all the ammunition they need to try and reduce their asking price.
 
 
 
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