capital requirement meaning

  "capital requirement" in a sentence
[Business]
noun [C]

(Finance )

an amount of CAPITAL that a company is legally required to have; the rule that sets this amount:

The government wants to increase the capital requirements for financial institutions.

Banks are subject to minimum capital requirements.

The minimum capital requirement for listed companies (= ones who trade their shares on the stock exchange) is €100 000.

CAPITAL ADEQUACY


[Finance]
The standardized requirements in place for banks and other depository institutions that relates to how much liquidity is required to be held for a certain level of assets through regulatory agencies such as the Bank for International Settlements, Federal Deposit Insurance Corporation or Federal Reserve Board. These requirements are put into place to ensure that these institutions are not participating or holding investments that increase the risk of default and that they have enough capital to sustain operating losses while still honoring withdrawals.

Examples

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  1. strengthen capital requirements for banks
  2. government finance ca n't meet for the capital requirement
  3. reduced capital requirements
  4. minimum capital requirements
  5. in addition, there will be explicit capital requirements for operational risk

Related Words

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  6. capital requirements meaning
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  8. capital reserves meaning
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  10. capital share meaning
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