What is Regulatory Capital?
Regulatory Capital The minimum amount of capital financial institutions are required to hold by regulators to absorb losses and promote systemic stability, calculated under frameworks such as Basel III and Solvency II.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Regulatory Capital” Used in Practice?
Basel III increased the requirements for regulatory capital to strengthen banks’ ability to withstand financial shocks and protect depositors.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Regulatory Capital?
The minimum amount of capital financial institutions are required to hold by regulators to absorb losses and promote systemic stability, calculated under frameworks such as Basel III and Solvency II.
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