Capital conservation: Difference between revisions
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The company law principle that capital should be conserved for the protection of creditors. For example, dividends can only legally be paid out of retained profits, not out of capital. | 1. ''Company law.'' | ||
The company law principle - also known as capital maintenance - that capital should be conserved for the protection of creditors. | |||
For example, dividends can only legally be paid out of retained profits, not out of capital. | |||
2. ''Financial services - banks - supervision - regulation - capital adequacy.'' | |||
A capital adequacy requirement for all banks to build up an additional loss-absorbing capital cushion to improve their resilience to future stresses. | |||
The idea is for banks to build up the loss-absorbing cushions outside periods of stress, to be drawn down if losses are incurred in the future. | |||
== See also == | |||
*[[Bank]] | |||
*[[Capital]] | |||
*[[Capital adequacy]] | |||
*[[Capital Conservation Buffer]] | |||
*[[Capital maintenance]] | |||
*[[Company law]] | |||
*[[Creditors]] | |||
*[[Dividend]] | |||
*[[Financial services]] | |||
*[[Limited liability]] | |||
*[[Loss absorbing capacity]] | |||
*[[Profit and Loss reserve]] | |||
*[[Regulation]] | |||
*[[Reserves]] | |||
*[[Resilience]] | |||
*[[Retained earnings]] | |||
*[[Share capital]] | |||
*[[Share premium]] | |||
*[[Supervision]] | |||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | |||
Latest revision as of 07:15, 1 February 2024
1. Company law.
The company law principle - also known as capital maintenance - that capital should be conserved for the protection of creditors.
For example, dividends can only legally be paid out of retained profits, not out of capital.
2. Financial services - banks - supervision - regulation - capital adequacy.
A capital adequacy requirement for all banks to build up an additional loss-absorbing capital cushion to improve their resilience to future stresses.
The idea is for banks to build up the loss-absorbing cushions outside periods of stress, to be drawn down if losses are incurred in the future.
