What is Minimum Capital Requirement?
Minimum Capital Requirement The lowest amount of capital a bank is required to hold by regulators to cover its risks and protect depositors, as specified by Basel III/IV and national regulations.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Minimum Capital Requirement” Used in Practice?
The minimum capital requirement ensures banks can absorb losses and continue operating during periods of financial stress.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Minimum Capital Requirement?
The lowest amount of capital a bank is required to hold by regulators to cover its risks and protect depositors, as specified by Basel III/IV and national regulations.
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