Capital Requirement is the standardized requirements in position for banks as well as depository institutions, which determines just how much liquidity is required to be held for the certain level with assets through regulatory agencies for example the Bank for National Deposit Insurance Firm or Federal Reserve Board. These requirements are place into place to ensure these institutions are not participating or holding investments that enhance the risk of default and they have capital to sustain managing losses while nonetheless honoring withdrawals.
Capital Requirement
