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Capital Adequacy ratio

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Capital adequacy ratio of banks rose 13.98% in 2008-09
The Economic Times  Sep 21  Comment 
Banks kept aside more capital against various risks during 2008-09 with their capital adequacy ratio increasing to 13.98 per cent from 13.01 per cent a year ago, as they became selective owing to the global financial crisis.
New President Targets Capital Adequacy Ratio at Toshiba
JCN Network  Aug 9  Comment 
Norio Sasaki, the new president of Toshiba Corp., said he aims to boost the company's capital adequacy ratio, which dropped below 14 percent earlier this year, to 30 percent during his tenure as he embarks on the challenge of bringing the...
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more ▼WIKI ANALYSIS
This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition.
 

A Capital Adquecy Ratio is a measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures.

Also known as ""Capital to Risk Weighted Assets Ratio (CRAR).

This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world.

Two types of capital are measured: tier one capital, which can absorb losses without a bank being required to cease trading, and tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors.

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