Capital Adequacy Ratio

Definition

• A ratio of total capital divided by risk-weighted assets and risk-weighted off-balance sheet items. A bank is expected to meet a minimum capital ratio of 8.0% unless a higher ratio has been specifically prescribed by the Superintendent of Financial Institutions.

Synonyms
minimum asset value, reserved cash

Related Terms and Acronyms

• Best's Capital Adequacy Relativity — Definition,
  • A percentage used to measure a company's relative capital strength as compared to an industry peer composite.
• Capital — Definition,
  • Money that is used to make money; for example, to buy rental property or a business.