What is Capital Adequacy?
When a bank suffers large and unexpected losses, they rely on capital to absorb those losses before affecting their creditors.
The Reserve Bank requires banks to hold a minimum amount of capital against the riskiness of their assets to make banks more resilient to losses.
The more capital a bank has, the worse financial conditions it may be able to withstand before depositors are affected.
You can learn more about your bank’s capital adequacy at the Bank Financial Strength Dashboard.
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