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
Liquidity Adjustment Facility
Data Warehousing
One-Tailed Test
Less-than-Truckload
Original Cost
POPULAR ARTICLE
SEE FOREX TUTORIAL
Ethical Investing: Socially Responsible Investing
Digesting Financial Statements: Long-Lasting Assets
Digesting Financial Statements: Filing
Health Savings Account: Eligibility
Buying a Home: Getting Into the Escrow Process
ECONOMIC CALENDAR
| Time | Country | Indices | Period |
|---|---|---|---|
| 02:30 | PMI Manufacturing | Nov | |
| 02:30 | Company Operating Profits | 3 quarter | |
| 02:30 | ANZ Jobs Advertisements | Nov | |
| 03:45 | Markit Final Manufacturing PMI | Nov | |
| 07:30 | Commodity Prices | Nov | |
| 09:30 | Retail Sales | Oct | |
| 10:15 | PMI Manufacturing | Nov | |
| 10:45 | PMI Manufacturing | Nov | |
| 10:50 | PMI Manufacturing | Nov |
