Pillar 2 and Quarterly rate: Difference between pages

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''Banking - regulation.''
The quarterly rate of interest (or yield) is a quoting convention for the simple interest ''nominal annual rate'' for compounding once per quarter (four times per year).


Pillar 2 is the aspect of banking supervision which addresses firm-wide governance and risk management, among other matters.
For example, if the quoted quarterly rate is 6.00%, the amount of interest compounded quarterly is 6.00%/4 = 1.50%.


Additional capital requirements may be imposed by bank supervisors under Pillar 2, depending on their evaluation of banks' internal assessments of their risks and capital requirements.
Not to be confused with the related ''annual effective'' rate, which in this case is 1.015<sup>4</sup> - 1 = 6.14%.


== See also ==
* [[Annual effective rate]]
* [[Nominal annual rate]]
* [[Periodic rate of interest]]


== See also ==
* [[Bank supervision]]
* [[Basel III]]
* [[Capital adequacy]]
* [[Pillar 1]]
* [[Pillar 3]]
* [[SREP]]

Revision as of 14:20, 23 October 2012

The quarterly rate of interest (or yield) is a quoting convention for the simple interest nominal annual rate for compounding once per quarter (four times per year).

For example, if the quoted quarterly rate is 6.00%, the amount of interest compounded quarterly is 6.00%/4 = 1.50%.

Not to be confused with the related annual effective rate, which in this case is 1.0154 - 1 = 6.14%.

See also


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