Risk-Weighted Assets
In terms of the minimum amount of capital that is required within banks and other institutions, based on a percentage of the assets, weighted by risk. Investopedia Says:
The idea of risk-weighted assets is a move away from having a static requirement for capital. Instead, it is based on the riskiness of a bank's assets. For example, loans that are secured by a letter of credit would be weighted riskier than a mortgage loan that is secured with collateral. Related Terms:
Asset
Capital
Collateral
Letter of Credit
Risk-Based Capital Requirements |