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Risk-Weighted Assets
(redirected from Risk-Weighted Asset)

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Risk-Weighted Assets
The reserve requirements for a bank, weighted according to risk. Risk-weighted assets are the capital a bank must keep to cover its liabilities. They are calculated as follows: Government bonds have a risk weight of 0% while all other assets have a risk weight of 100%. One calculates the units of each type of asset a bank carries to find how risky its assets are.

Risk-Weighted Assets

What Does Risk-Weighted Assets Mean?

The minimum amount of capital that is required within banks and other institutions, based on a percentage of the assets, weighted by risk.

Investopedia explains Risk-Weighted Assets

The idea behind risk-weighted assets is to move away from having a static requirement for capital. Instead, it is based on the riskiness of a bank's assets. For example, loans that are secured by a letter of credit are considered riskier than a mortgage loan that is secured with collateral.

Related Terms:
Asset
Capital
Correlation
Risk
Weighted Average



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As a result, the transaction is expected to reduce regulatory risk-weighted assets by approximately $4 billion, or approximately 8.
The minimum capital requirement reflected a percentage of risk-weighted assets of the bank.
The Spanish bank said that it is seeking to divest about USD10bn in risk-weighted assets held by Sovereign Bancorp, Inc.
 
 
 
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