Risk-Adjusted Capital Ratio

Risk-Adjusted Capital Ratio is a measure of a financial institutions that compares total adjusted capital (TAC) to the institutions risk-weighted assets.

Risk-Adjusted Capital Ratio

Risk-Adjusted Capital Ratio is a measure of a financial institutions that compares total adjusted capital (TAC) to the institutions risk-weighted assets.

 


Explanation of Risk-Adjusted Capital Ratio

There are many variations of risk-adjusted capital ratios, depending on how the analyst defines capital. Risk-adjusted capital ratios are used to assess the capital adequacy of a financial institution. Analyzing these ratios can help determine whether a bank has enough capital to withstand a downturn in the economy.


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