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.


See also