Risk-Based Capital Requirement

What Does It Mean?
What Does Risk-Based Capital Requirement Mean?
A stated requirement of liquid reserves placed upon banks and institutions that deal in risky ventures.
Investopedia Says
Investopedia explains Risk-Based Capital Requirement
These requirements exist for the protection of investors who hold an interest in these types of businesses. Governing bodies place reserve requirements upon these institutions based on the premise that stakeholders will still receive limited payment should insolvency occur.
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