BFM: Concepts and Practice · Part D: Balance Sheet Management

Chapter 20: Capital adequacy

What counts as capital, how risk-weighted assets are built, and how a bank keeps its ratios above the line.

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

• 20.1The tiers of capitalp. 285
• 20.2Deductions and limitsp. 286
• 20.3Risk-weighted assetsp. 287
• 20.4Ratios, buffers and leveragep. 288
• 20.5Managing capitalp. 289
• Exam traps and quick checksp. 290
• Practice: 16 questions in three roundsp. 291
• Answers, with every wrong option explainedp. 293
• Make it stickp. 295
• Chapter 20 on one pagep. 296

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.