Minimum Capital Requirement
/ˈmɪnɪməm ˈkæpɪtl rɪˈkwaɪərmənt/
Definitions
- (n.) The legally mandated minimum amount of capital that a financial institution must hold to cover its risks and protect depositors and the financial system.
Banks must comply with the minimum capital requirement to ensure solvency during economic downturns.
Forms
- minimum capital requirement
- minimum capital requirements
Related terms
See also
Commentary
Minimum capital requirements ensure institutional resilience; drafters should specify calculation method and applicable jurisdiction.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.