capital requirements
Minimum bank cushion
Capital requirements are the minimum amounts of money or assets that financial institutions must hold relative to their risk exposure.
Regulators impose these requirements to ensure banks can absorb losses without failing: The new capital requirements forced several banks to raise additional funds.
Higher requirements constrain lending but provide a cushion against economic shocks.
- regulatoryInvolving official oversight
- reservesResources held back
- liquidityConvertibility to cash
- solvencyCapacity to pay debts
- BaselSwiss Rhine city
buffers · financial cushion · equity · ratio · compliance · banking · too big to fail · threshold · minimum threshold · minimum · adequacy · leverage · assets · cushion · stress test · stress testing · balance sheet · prudential
capital requirementsundercapitalization
Insufficient business funding level
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