Capital Adequacy Ratio

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Capital Adequacy Ratio

A measure of a bank's ability to meet its obligations relative to its exposure to risk. The capital adequacy ratio exists to ensure that a bank is able to handle losses and fulfill its obligations to account holders without ceasing operations. It is calculated as:

CAR = ( Tier 1 Capital + Tier 2 Capital ) / Risk-weighted assets.
References in periodicals archive ?
MANAMA: All licensed financial institutions in Bahrain will be required to publicly disclose their risk profile, risk management, capital adequacy, capital instruments and remuneration practices, under new rules by the Central Bank of Bahrain (CBB).
CBB issues rules for financial institutions
Manama : All licensed financial institutions in Bahrain will be required to publicly disclose their risk profile, risk management, capital adequacy, capital instruments and remuneration practices, under new rules by the Central Bank of Bahrain (CBB).
Bahrain central bank issues new disclosure regulations
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