CHAPTER ELEVEN

Capital—Risk, Regulation and Adequacy

CHAPTER STRUCTURE

Section I Basic Concepts

Section II Risk-Based Capital Standards—Regulatory Capital (Basel norms)

Section III Application of Capital Adequacy to Banks in India

Section IV Illustrative Problems on Calculating Capital Adequacy

Chapter Summary

Test Your Understanding

Topics for Further Discussion

Suggestions for Further Reading

Annexures I, II (Case study), III, IV

KEY TAKEAWAYS FROM THE CHAPTER
  • Understand why capital is so important for banks.
  • Know what constitutes bank capital.
  • Analyse what bank capital should be related to, if ‘safety’ of bank is to be ensured.
  • Understand the difference between accounting capital, economic capital and regulatory capital.
  • Learn to measure ...

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