Banking & Financial Pre-Final (freshman)

A.K.A regulatory capital or capital adequacy is the amount of capital a bank must have as required by the regulators.

• Regulatory capital

• Economic capital

• Capital requirement

• Capital

The minimum capital requirement as demanded by the regulators; it is the amount a bank must hold to operate.

• Capital requirement

• Regulatory capital

• Economic capital

• Capital

The theoretical view on minimum capital requirement based on underlying risks of the bank’s assets and operations.

• Regulatory capital

• Capital requirement

• Economic capital

• Economic requirement

This is not a capital requirement.

•   The least amount of money that banks and depository institution are required to maintain.

• ·       They are set to ensure banks and depository institution's holdings are not dominated by investments that increase the risk of default.

• ·       Should never be claimed.

• Should be claimed.

This is not a capital requirement.

• ·       Should never be lent.

• ·       Ensure that banks and depository institutions have enough capital to sustain operating institutions have enough capital to sustain operating losses while still honoring withdrawals.

• ·       They are set to ensure banks and depository institutions holdings are not dominated by investments that increase the risk of default.

• The owner should have at least 1M.

This is not a capital requirement.

• ·       Should never be on debt.

• Should be on debt.

• ·       Reserved capital is meant to deal with unexpected losses.

• Should not get help from the creditors

·     ________ implements capital requirements a way to promote banks stability.

·       Requiring banks to hold ________ l reduces bank moral hazard by discouraging banks from taking on excessively risky loan portfolios and reduces bank distress.

Universal bank with more than 100 branches _________

(all capital letters)

Commercial with more than 100 branches_______

(ALL CAPITAL LETTERS)