ECONOMIC CAPITAL
Amount of capital a company has to secure in order to remain solvent. Computed internally, it is the amount of capital a firm must have to support any risks it takes or will take on. The measurement process entails converting a specified risk to the amount of capital needed to support it. Computations are based on the firm’s financial strength and expected losses.
Financial strength pertains to the probability of the company not becoming insolvent within the measurement period and the confidence level in the statistical condition. Most banks use a confidence measurement between 99.96% and 99.98%, the insolvency rate expected for an institution with a AA or Aa credit rating.
On the other hand, the expected loss refers to the expected average loss within the measurement period and represent the cost of operating business, normally fianced by operating profits.
POPULAR TERMS
Target Return
Remainder Man
Average Collected Balance
Bankable Funds
Prudent-Person Rule
POPULAR ARTICLE
SEE FOREX TUTORIAL
Ethical Investing: Niche Investment Style
Buying a Home: Determining the Amount You Can Afford
The Types of Stock
Retirement Planning: Allocating Money for Retirement
An Introduction to the Basics of Economics
ECONOMIC CALENDAR
| Time | Country | Indices | Period |
|---|---|---|---|
| 04:00 | Expected Annual Inflation 2y from now | 4 quarter | |
| 07:00 | Economy Watchers Survey | Oct | |
| 10:30 | New Yuan Loans | Oct | |
| 01:30 | Westpac Consumer Sentiment | Nov | |
| 01:50 | M2 Money Supply + CD | Oct | |
| 02:30 | NAB Business Confidence | Oct | |
| 08:00 | Prelim Machine Tool Orders | Oct | |
| 09:00 | CPI | Oct | |
| 09:00 | Harmonized CPI | Oct |
