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CAPITAL ADEQUACY RULES

Statistics Directorate    
Definition:
Capital adequacy rules relate to the minimum amount of capital (equity) that institutions must hold relative to their assets set by financial market regulators. These rules are designed to ensure that capital is sufficient to absorb likely losses. It was agreed at the Bank for International Settlements in 1988 that the minimum ratio of capital to risk-adjusted assets for international banks should be 8 per cent.

Source Publication:
The OECD Economic Outlook: Sources and Methods.

Cross References:
Capital adequacy ratio

Hyperlink:
http://www.oecd.org/eco/outlook/sources-and-methods.htm

Statistical Theme: Financial statistics

Created on Tuesday, September 25, 2001

Last updated on Friday, March 28, 2014