Capital adequacy ratio/Definition: Difference between revisions

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The ratio of a bank's capital to its assets: a requirement that depends upon the riskiness of the assets.
The ratio of a bank's [[capital (banking)|capital]] to its risk weighted credit exposures. May be defined in terms of [[Tier 1 capital|tier 1 (core)]] or [[tier 2 capital|tier 2]] capital.

Latest revision as of 16:18, 27 October 2011

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Capital adequacy ratio [r]: The ratio of a bank's capital to its risk weighted credit exposures. May be defined in terms of tier 1 (core) or tier 2 capital.