Capital conservation: Difference between revisions
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''Company law.'' | 1. ''Company law.'' | ||
The company law principle - also known as capital maintenance - that capital should be conserved for the protection of creditors. | 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. | 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 == | == See also == | ||
*[[Bank]] | |||
*[[Capital]] | *[[Capital]] | ||
*[[Capital adequacy]] | |||
*[[Capital Conservation Buffer]] | |||
*[[Capital maintenance]] | *[[Capital maintenance]] | ||
*[[Company law]] | *[[Company law]] | ||
*[[Creditors]] | *[[Creditors]] | ||
*[[Dividend]] | *[[Dividend]] | ||
*[[Financial services]] | |||
*[[Limited liability]] | *[[Limited liability]] | ||
*[[Profit and Loss reserve]] | *[[Profit and Loss reserve]] | ||
*[[Regulation]] | |||
*[[Reserves]] | *[[Reserves]] | ||
*[[Resilience]] | |||
*[[Retained earnings]] | *[[Retained earnings]] | ||
*[[Share capital]] | *[[Share capital]] | ||
*[[Share premium]] | *[[Share premium]] | ||
*[[Supervision]] | |||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
Revision as of 21:04, 29 January 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.
