Capital Requirement
Definition
A regulatory floor on a bank's equity capital relative to its assets. Cushions the bank against losses and reduces taxpayer exposure.
Example
Basel III requires a minimum core equity tier 1 ratio of 4.5%, plus buffers.
A regulatory floor on a bank's equity capital relative to its assets. Cushions the bank against losses and reduces taxpayer exposure.
Basel III requires a minimum core equity tier 1 ratio of 4.5%, plus buffers.