Skip to main content

Search from vocabulary

Content language

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

Download this concept: