Also known as: DC&
DC stands for various terms. Discover the full forms, meanings, and possible interpretations of DC across different fields and industries.
In the banking sector, capital refers to the financial assets or resources that banks and financial institutions use to fund their operations, absorb losses, and ensure stability in the financial system. It is a critical measure of a bank's financial health and resilience against potential risks. Capital can be categorized into tiers, with Tier 1 capital being the core measure, including common equity and disclosed reserves, which are the most reliable and liquid forms.
The importance of capital in banking cannot be overstated, as it serves as a buffer against unexpected losses, ensuring that banks remain solvent and operational during economic downturns. Regulatory bodies, such as the Basel Committee on Banking Supervision, set minimum capital requirements to promote stability and protect depositors' interests. These requirements are designed to ensure that banks have enough capital to cover their risks, including credit, market, and operational risks, thereby maintaining confidence in the financial system.
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