The Capital Ratio is the ratio of the capital of a bank to its risk-weighted assets, used by regulatory agencies to assess the bank's resilience to losses and compliance with regulations, defined primarily by the Basel Agreements.
Risk-Weighted Assets (RWA) are a critical measure used in banking to assess capital adequacy by assigning varying levels of risk to different asset classes.
Risk-Weighted Assets (RWA) represent a bank's assets weighted by their risk levels, influencing the calculation of Tier 1 Capital Ratio.
A comprehensive guide to understanding Risk-Weighted Assets (RWA), their calculation, significance, and role in the Basel III regulatory framework.
