Capital requirements


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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 ?
Some commenters have argued that higher capital requirements may blunt this effort.
By calling Bauer's BankRater(R), toll free at 800-388-6686, consumers can learn in if their bank meets or fails to meet all federal regulatory capital requirements.
The four federal banking agencies on February 17, 2000, released proposed revisions to their risk-based capital requirements for certain obligations related to securitized transactions.
This reduction in assets is in accordance with the Savings Bank's Business Plan of reducing assets in an attempt to meet current capital requirements.
If your bank is rated two-stars or below, it does not meet, or will not meet if present trends continue, all of the minimum federal regulatory capital requirements, BankRater(R) will provide you with its star rating at no charge.
By this rating, BauerFinancial is signifying that ECB is safe, financially sound and operating well above our regulatory capital requirements.
We believe that rather than specifying detailed capital requirements for a select group of assets by statute, it would be preferable for the Congress to revise this legislation to support the agencies' efforts to develop appropriate capital standards for securitizing all types of loans.
Though recent measures towards reducing the regulatory capital requirements have eased pressures for some banks to comply with local requirements, Fitch believes that current minimum capital requirements could prove insufficient to cope with the historic volatility of the Venezuelan market; more over, higher government intervention could impose more burdens on local banks, while many shareholders may not have the capacity or incentives to support higher capital ratios in the short and medium term.
Along with other banking supervisors in the United States and abroad, the Federal Reserve has worked to incorporate such risks into regulatory minimum capital requirements.
At the same time, the rating agencies have increased capital requirements, so this has managed to offset a bit of the price-hardening.
The primary objectives of the bank's capital plan are to achieve compliance with regulatory capital requirements through increased core earnings, diversification of interest-earning assets, collection of non- performing assets, and continued reduction in operating expenses.

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