Capital adequacy ratio

Formula

Capital adequacy ratio formula
CAR
capital adequacy ratios
T1
equity capital or disclosed reserves
T2
undisclosed reserves or general loss reserves or subordinate term debts
a
risk weighted assets

Formula description

Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR), is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements.

Calculator (how to use calculator?)

Capital adequacy ratio formula
T1
T2
a
CAR
Precision

Formula code








References

  1. Wikepedia:Capital adequacy ratio.

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