Risk-Weighted Assets

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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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Capital Adequacy Ratio Capital Requirements			8 billion sale was the main driver for a major decline in risk-weighted assets to $16 billion at the end of the first-quarter of this year from $25 billion at end-2007, which strengthened capitalisation to adequate levels. Fitch affirms stable outlook for GIB by TradeArabia (Manama, Bahrain) The risk-based capital ratio measures a bank's total capital against its risk-weighted assets. LibertyBank posts big loss as it digests loan defaults by The Register-Guard (Eugene, OR) This transaction protects the Bank from any future losses from these securities, materially delevers and de-risks the balance sheet, reduces risk-weighted assets resulting in a significant enhancement of the Bank's regulatory capital adequacy ratios, and eliminates the funding risks of the assets. Moody's confirms GIB's A3 rating and upgrades outlook to stable by Mena Report			Risk Reversal Risk seeker Risk Taker Risk Tolerance Risk Transfer risk versus reward Risk-Adjusted Discount Rate Risk-Adjusted Performance Risk-adjusted profitability Risk-Adjusted Return Risk-Averse Risk-based capital ratio risk-based capital requirement Risk-Free Risk-Free Asset Risk-Free Interest Rate risk-free rate Risk-Free Rate of Return Risk-Free Return Risk-Loving Risk-Neutral Risk-Prone Risk-Return Trade-Off Risk-Return Tradeoff Risk-Reward Ratio Risk-Weighted Assets Riskless Arbitrage Riskless Investment Riskless or Risk-Free Asset Riskless Rate Riskless rate of return Riskless Transaction Risks and Opportunities Risky Asset Risky Operation Risparmiare Risque d'insolvabilite Risque de change Risque de penurie Risque de ralentissement Risque exterieur Risque-Pays Risultato finale Ritenuta alla fonte Ritenuta d'acconto Ritirare i titoli Riyal RMBS RO ROA Road Show			Risk-Need-Responsivity Risk-neutral Risk-Neutral Valuation Relationship Risk-prone Risk-Reducing Salpingo Oophorectomy Risk-Reduction Mastectomy Risk-Related Medical History Risk-return spectrum Risk-return trade-off Risk-Return Trade-Offs Risk-return tradeoff Risk-Return Tradeoffs Risk-Reward Basis risk-reward ratio Risk-Reward Ratios Risk-Screening Environmental Indicators Risk-Seeking risk-sharing hypothesis Risk-Standardized Mortality Rate risk-taker Risk-taking Risk-taking Risk-taking Risk-taking Risk-taking Risk-to-Reward Risk-tolerant Risk-tolerant Risk-Weighted Asset Risk-Weighted Assets Risk-Weighted Capital Risk-Weighted Capital Ratio Risk/Reward Basis Risk/Reward Trade-Off Risk/Reward Trade-Offs Risk/Reward Tradeoff Risk/Reward Tradeoffs Risk/Value Assessment Model risked risked risked risked risked risked Risked Exploration Net Asset Value risked neck risked neck risked neck risked neck risked neck Risken-Nummedal-Graham-Haken risker risker risker risker risker risker Riskful Riskful riskier

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