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 ?
We note that, in its consideration of the financial modernization legislation, the Congress considered the appropriateness of capital standards at the holding company level and did not limit the Board's authority to develop appropriate capital requirements for bank holding and financial holding companies.
Pakistani banks have been accused of manipulating their account books to meet minimum capital requirements set by the State Bank of Pakistan (SBP).
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.
PA) has indicated that the G20 meet would lead to more capital requirements for banks.
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.
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.
It may well be necessary to retrace our steps and begin purposefully to move to capital requirements that would, over time, be more consistent with what the market would require if the safety net were more modest.
The aggregate S2 solvency capital requirements (SCR) coverage ratio was 220% at end-2016.

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