Risk Weighted Assets
From ACT Wiki
Bank supervision - capital adequacy.
(RWAs).
Risk weighted assets provide a measure of the total scale and risk of a regulated bank's activities, against which the bank is required to hold minimum levels of regulatory capital.
In simple terms, assets are multiplied by appropriate risk weightings (historically ranging from 0% to 100%) and aggregated.
Other risks, including operational risk, are also appropriately evaluated and risk weighted, adding additional RWAs to the regulatory total.
The calculation of RWAs has been increasingly refined over time.
