Capital conservation: Difference between revisions

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.

@@ Line 1: / Line 1: @@
-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.
+.  ''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.
+.  ''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]]