Bank capital ratio calculator
List a bank's assets with a risk weight for each, add its capital, and see its risk-weighted assets, capital ratio and leverage ratio, and how much loss it could take before falling to the minimum. Free, no sign-up, nothing leaves your browser.
- 1Type in your own numbers
- 2The tool works it out
- 3See the answer clearly
The starting balance sheet and risk weights are only an example; enter any units (for example millions). Real risk weights and requirements depend on the rules a regulator applies, and regulators add buffers on top of the minimums.
What capital means
Capital is the part of a bank's funding that can absorb losses, mainly shareholders' equity and retained profits. Deposits are not capital, because the bank owes them back to customers. Capital requirements make banks fund part of their lending with their own money, so the bank can keep going when some loans go bad.
Why assets are risk-weighted
International standards from the Basel Committee on Banking Supervision, known as Basel III, set minimum capital ratios based on how risky a bank's assets are. Safer assets count for less, riskier ones for more. National regulators, such as the Prudential Regulation Authority in the UK, apply the rules and can add extra buffers.
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