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A capital requirement (also known as regulatory capital, capital adequacy or capital base) is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital adequacy ratio of equity as a percentage of risk-weighted assets.
The Capital Requirements Directives (CRD) for the financial services industry have introduced a supervisory framework in the European Union which reflects the Basel II and Basel III rules on capital measurement and capital standards.
The Capital Requirements Regulation (EU) No. 575/2013 is an EU law that aims to decrease the likelihood that banks go insolvent. [1] With the Credit Institutions Directive 2013 the Capital Requirements Regulation 2013 (CRR 2013) reflects Basel III rules on capital measurement and capital standards.
Thus, higher capital requirements can raise the cost of funding to a bank, and the bank can pass higher costs on to households, businesses, and clients engaged in a range of financial activities
The Federal Reserve Friday announced it will extend the comment period for proposed higher bank capital requirements in the wake of banks' complaints the requirements would hurt lending.
Thus the actual capital requirement is between 11 and 13.5% (including Capital Conservation Buffer and Counter Cyclical Buffer). [ 14 ] In response to a questionnaire released by the Financial Stability Institute (FSI), 95 national regulators indicated they were to implement Basel II, in some form or another, by 2015.
The U.S. Federal Reserve Bank and other U.S. bank regulators said this morning that new regulations related to capital reserve requirements for the country's banks will be delayed beyond the ...
Definition of Capital Subgroup: reviews eligible capital instruments Capital Monitoring Group: co-ordinates the expertise of national supervisor in monitoring capital requirements Cross-border Bank Resolution Group: compares the national policies, legal frameworks and the allocation of responsibilities for the resolution of banks with ...