Capital buffer and Opportunity cost: Difference between pages

Revision as of 11:05, 22 June 2016

The expected return that is foregone by investing in a project, rather than in the next best use of capital or other resources.

It is the opportunity cost of capital and other resources that is the relevant economic measure for financial decision making purposes.

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-''Bank capital adequacy''
+The expected return that is foregone by investing in a project, rather than in the next best use of capital or other resources.
-An additional cushion of capital which banks are required to hold, to protect them from breaching minimum capital requirements under conditions of stress.
+It is the opportunity cost of capital and other resources that is the relevant economic measure for financial decision making purposes.
-Capital buffers must be held in the form of Common Equity Tier 1 (CET1) capital.
 == See also ==
-* [[Buffer]]
+* [[Cost of capital]]
-* [[Capital]]
+* [[Opportunity cost of capital]]
-* [[Capital adequacy]]
+* [[Production possibility curves]]
-* [[Capital Conservation Buffer]]
+* [[Supernormal profit]]
-* [[Common Equity Tier 1]]
-* [[Countercyclical buffer]]
-* [[G-SII buffer]]
-* [[Liquidity buffer]]
-* [[Stress]]
-* [[Systemic Risk Buffer]]