Common Equity Tier 1 CET1- Overview, How It Works, CAR
Risk-Weighted Assets (RWAs) represent the bank’s exposure to credit, market, and operational risks. For instance, government securities have lower weights than unsecured retail loans, reflecting their relative safety. By incorporating RWAs into the CAR formula, regulators ensure that the capital adequacy measure aligns with the bank’s actual risk exposure. The significance of capital ratios อ่านต่อ…