Capital account


 

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Capital account

1. (Current definition) Since sometime in the 1990s, "capital account" refers to a minor component of international transactions, involving unilateral transfers of ownership of property. The common definition, below, describes what is now called the financial account. 2. (Common definition) A country's international transactions arising from changes in holdings of real and financial capital assets (but not income on them, which is in the current account). Includes FDI, plus changes in private and official holdings of stocks, bonds, loans, bank accounts, and currencies. 3. (Bretton-Woods definition) Same as common definition except excluding official reserve transactions. This definition was used under the Bretton Woods System of pegged exchange rates, but is less meaningful under floating exchange rates.

Capital account

Net result of public and private international investment and lending activities.



Capital account

Similar Matches

Core capital

Core capital

The capital required of a thrift institution, which must be at least 2% of assets to meet the rules of the Federal Home Loan Bank.


Capital loss

Capital loss

The loss in value that the owner of an asset experiences when the price of the asset falls, including when the the currency in which the asset is denominated depreciates. Contrasts with capital gain.


Return of capital

Return of capital

A cash distribution resulting from the sale of a capital asset, or securities, or tax breaks from depreciation.


Capital adequacy

Capital adequacy

A 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.


Capital Gains

Capital Gains

Gains realized from the sale of capital assets. Generally, the difference between cost and selling price, less certain deductible expenses. Used mainly for income tax purposes.


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