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Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
38% - Moderately

Capital Adequacy Ratio

Synonyms:minimum asset value, reserved cash
Filed Under: financial-banking
Tags: banking

Definition of capital adequacy ratio

capital adequacy ratio
1. 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.

Related Terms and Acronyms:

  • best's capital adequacy relativity   A percentage used to measure a company's relative capital strength as compared to an industry peer composite.
  • capital   Money that is used to make money; for example, to buy rental property or a business.

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