14 thoughts on “Bank capital requirements, explained

  1. I don't know who the audience is for this but it can't be bankers, or anyone learning finance. Because IT IS WRONG. Don't get Capital (the net figure of assets and liabilities) confused with Liquidity (cash available for customers to take out at any given moment).

  2. love the analogy…. but any banker in here would have been a lot happier with introducing the Basel calculations and how local regulations impact the requirement for the "air bag". I was expecting a bit more from the video 🙁

    Liquidity and Capital are inevitably tied… last I checked. A run on banks can lead to insolvency if its illiquid; CAR now requires the airbags to be in place as a buffer to liquidity…… ye or neigh people?

  3. This is complete nonsense, I am afraid. Capital does not mean money. You are confusing liquidity requirements with capital adequacy requirements. It has absolutely nothing whatsoever to do with 'cash in bank vaults'. Please, if you are a student, disregard this video, and go elsewhere to learn about the distinction between liquidity requirements and capital adequacy requirements. the presenter confuses the two.

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