| Capital
Adequacy Ratio - CAR |
 |
A
measure of the amount of a bank's capital expressed as a percentage
of its risk weighted credit exposures.
|
 |
This
ratio is used to protect depositors and promote the stability and
efficiency of financial systems around the world.
Two types of capital are measured: tier one capital, which can absorb
losses without a bank being required to cease trading, and tier two
capital which can absorb losses in the event of a winding-up and so
provides a lesser degree of protection to depositors. |
|
|
|
|
Dictionary
