Risk-Weighted Assets

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What are 'Risk-Weighted Assets'

Risk-weighted assets, in terms of the minimum amount of capital that is required within banks and other institutions, are based on a percentage of the assets, weighted by risk.

BREAKING DOWN 'Risk-Weighted Assets'

The idea of risk-weighted assets is a move away from having a static requirement for capital. Instead, it is based on the riskiness of a bank's assets. For example, loans that are secured by a letter of credit would be weighted riskier than a mortgage loan that is secured with collateral.

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