Capital requirements

Capital requirements

Financing required for the operation of a business, composed of long-term and working capital plus fixed assets.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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