Regulatory Capital
/ˌrɛɡjʊˈleɪtəri ˈkæpɪtl/
Definitions
- (n.) The minimum amount of financial resources that a bank or financial institution must hold to cover its risks and comply with regulatory requirements.
The bank increased its regulatory capital to meet the new Basel III standards.
- (n.) Capital reserve mandated by regulatory authorities to ensure the stability and solvency of financial organizations.
Regulatory capital acts as a financial buffer against losses in the event of economic downturns.
Forms
- regulatory capital
Related terms
See also
Commentary
Regulatory capital definitions focus on the capital requirements set by financial regulators to ensure institutional solvency and risk management. Drafting should specify relevant jurisdictional standards when applicable.
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.