What is the bank's capital ratio? The United States, Japan and the European Union signed the Basel Accord, and there is a clause on it that will adjust the capital ratio of banks to 8%. What does this

What is the bank's capital ratio? The United States, Japan and the European Union signed the Basel Accord, and there is a clause on it that will adjust the capital ratio of banks to 8%. What does this mean? Capital adequacy ratio (CAR), also known as capital risk (weighted) asset ratio and capital to risk (weighted) asset ratio (Crar).

Is the ratio of bank assets to their risks. National regulators track the capital adequacy ratio of banks to ensure that banks can absorb certain risks. The definition of CAR is: CAR= Asset/risk, which can be the weighted asset risk (a) or the minimum total asset requirement stipulated by the respective national regulatory authorities. If weighted asset risk is used, then car = {t 1+t2}/a ≥ 8%. [1] The following inequalities are the standard requirements of national regulatory agencies. T 1 T2 are two types of assets that can be included in the total amount: the first type of assets (actually contributed owners' equity plus undistributed profits), that is, assets that banks can eliminate risks without stopping trading; As for the second type of assets (preferred stock plus 50% subordinated debt), assets that can resolve risks can be closed down for liquidation, with relatively little protection for depositors.