Capital adequacy: Difference between revisions

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1. ''Bank regulation - capital requirements - Bank for International Settlements (BIS).''


The system of regulating banks (and other financial institutions) by requiring them to maintain minimum acceptable levels of capital, adequate to absorb their potential credit losses and other trading losses.
Capital adequacy is the system of regulating banks (and other financial institutions) by requiring them to maintain minimum acceptable levels - and types - of capital, adequate to absorb their potential credit losses and other trading losses.




2.
Requirements are laid down internationally by the Bank for International Settlements (BIS) and implemented and monitored by domestic central banks.  


The current minimum amount of risk weighted capital that banks are required to maintain in proportion to the risk assets that they assume, normally used in connection with the requirements laid down internationally by the Bank for International Settlements (BIS) and monitored by domestic central banks.  
Historically, the BIS capital adequacy standard had been 8%.


Historically the BIS standard has been 8%.
Under the Basel III framework this standard was increased (strengthened) substantially - very roughly doubled - and its measurement refined.  


Under Basel III this standard will be increased (strengthened) substantially - very roughly doubled - and its measurement will be refined.  
 
2. ''Insurance & other contexts.''
 
Similar risk management and regulation in other contexts.
 
For example, insurance companies.




== See also ==
== See also ==
* [[Bank for International Settlements]]
* [[Bank for International Settlements]] (BIS)
* [[Basel II]]
* [[Basel II]]
* [[Basel 2.5]]
* [[Basel III]]
* [[Basel III]]
* [[Capital Adequacy Directive]]
* [[Basel III Endgame]]
* [[Capital Requirements Directive]]
* [[Capital]]
* [[Capital Requirements Directive]] (CRD)
* [[Capital Requirements Regulation]]  (CRR)
* [[Central bank]]
* [[Common equity]]
* [[Confidence]]
* [[Countercyclical buffer]]
* [[Countercyclical buffer]]
* [[PLAC]]
* [[Economic capital]]
* [[G-SIB]]
* [[GCLAC]]
* [[GCLAC]]
* [[Insurance]]
* [[Insurance Capital Standard]]
* [[Interest Rate Risk in the Banking Book]]  (IRRBB)
* [[Internal Capital Adequacy Assessment Process]]  (ICAAP)
* [[IRB]]
* [[Microprudential]]
* [[Microprudential]]
* [[Own funds]]
* [[Pillar 1]]
* [[Pillar 2]]
* [[Pillar 3]]
* [[Primary Loss Absorbing Capital]]
* [[Regulatory capital]]
* [[Reserve requirements]]
* [[Risk Weighted Assets]]  (RWAs)
* [[Settlement risk]]
* [[Settlement risk]]
* [[Slotting]]
* [[Slotting]]
* [[Solvency II]]
* [[Supervision]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]
[[Category:Compliance_and_audit]]

Latest revision as of 22:11, 19 February 2024

1. Bank regulation - capital requirements - Bank for International Settlements (BIS).

Capital adequacy is the system of regulating banks (and other financial institutions) by requiring them to maintain minimum acceptable levels - and types - of capital, adequate to absorb their potential credit losses and other trading losses.


Requirements are laid down internationally by the Bank for International Settlements (BIS) and implemented and monitored by domestic central banks.

Historically, the BIS capital adequacy standard had been 8%.

Under the Basel III framework this standard was increased (strengthened) substantially - very roughly doubled - and its measurement refined.


2. Insurance & other contexts.

Similar risk management and regulation in other contexts.

For example, insurance companies.


See also

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