CAPITAL ADEQUACY Definition

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CAPITAL ADEQUACY is a measure of the financial strength of a bank or securities firm, usually expressed as a ratio of its capital to its assets. For banks, there is now a worldwide capital adequacy standard, drawn up by the Basle Committee of the Bank for International Settlements. This ratio requires banks to have capital equal to 8 per cent of their assets.

 

Learn new Accounting Terms

INVENTORY VARIANCE see VARIANCE.

CAPM see CAPITAL ASSET PRICING MODEL.

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