Concept information
Preferred term
capital adequacy
Definition
- Capital adequacy is a measure of a financial institution's ability to absorb potential losses resulting from various risks to which it is exposed. Financial institutions are required to maintain a certain minimum amount of capital in order to ensure their soundness and the stability of the financial system as a whole. [Source: Encyclopedia of Business in Today's World; Capital Adequacy]
Broader concept
Belongs to group
URI
https://concepts.sagepub.com/social-science/concept/capital_adequacy
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