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
Accumulation Area
SEC Form DEF13E3
Transaction
IRS Publication 596
Depository Trust Company Tracking - DTCT
POPULAR ARTICLE
SEE FOREX TUTORIAL
Renovate or Move?
So You Want A Job in Financial Careers: A Guide
Buying a Home: Everybody’s Goal
Digesting Financial Statements: Filing
Inflation and Investments
ECONOMIC CALENDAR
| Time | Country | Indices | Period |
|---|---|---|---|
| 07:00 | Leading Indicators | May | |
| 10:00 | Ifo Business Climate Index | Jul | |
| 10:00 | Ifo Current Assessment | Jul | |
| 10:00 | IFO - Expectations | Jul | |
| 10:00 | Private Sector Credit | Jun | |
| 10:00 | M3 Money Supply | Jun | |
| 12:00 | CBI retail sales volume balance | Jul | |
| 14:30 | Durable Goods Orders | Jun | |
| 01:01 | BRC Shop Price Index | Jul |
