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Adequacy of coverage |
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Adequacy of coverageA test that measures the extent to which the value of an asset is protected from potential loss either through insurance or hedging.Adequacy of coverage Similar MatchesCapital adequacy ratioCapital adequacy ratioThe ratio of a bank's capital to its risk-weighted credit exposure. International standards recommend a minimum for this ratio, intended to permit banks to absorb losses without becoming insolvent, in order to protect depositors. Capital adequacyCapital adequacyA measure of the financial strength of a bank or securities firm, usually expressed as a ratio of its capital to its assets. For banks, there is now a worldwide capital adequacy standard, drawn up by the Basle committee, of the Bank for International Settlements. This BIS ration requires banks to have capital equal to 8 per cent of their assets. |
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