Capital Adequacy Ratio Calculator
The Capital Adequacy Ratio Calculator measures a bank's capital relative to its risk-weighted assets. Calculate Tier 1 ratio, Total CAR, and assess regulatory compliance with Basel III requirements — essential for banking analysts and risk managers.
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What is Capital Adequacy Ratio?
Capital Adequacy Ratio (CAR) measures a bank's available capital as a percentage of its risk-weighted assets (RWA). CAR ensures banks have enough capital to absorb losses and protect depositors. The Basel III framework requires a minimum CAR of 8%, with at least 6% from Tier 1 capital.
Tier 1 capital includes common equity (CET1) and retained earnings — the highest quality capital. Tier 2 capital includes subordinated debt and hybrid instruments. Regulators worldwide use CAR to assess bank stability and prevent systemic failures.
Formules et Équations utilisées
Ce calculateur s'appuie sur 5 équations fondamentales :
1 Capital Adequacy Ratio ▼
A bank with $10B Tier 1, $3B Tier 2, and $100B RWA: CAR = ($13B / $100B) × 100 = 13%.
2 Tier 1 Ratio ▼
A bank with $8B Tier 1 capital and $80B RWA has a Tier 1 ratio of 10%.
3 CET1 Ratio ▼
Basel III requires a minimum CET1 ratio of 4.5%. Most banks target 10%+ for safety.
Comment utiliser ce calculateur
Pour utiliser ce Calculateur de Ratio, suivez ces 3 étapes :
Saisir les Valeurs
Saisissez les valeurs de ratio connues dans les champs. Laissez un champ vide — c'est la valeur manquante que le calculateur va chercher à résoudre.
Choisir le Mode
Sélectionnez le mode de ratio — Résoudre, Simplifier ou Mettre à l'échelle. Chaque mode applique des formules différentes à vos valeurs.
Obtenir les Résultats
Cliquez sur Calculer. L'écran de résultats affiche la réponse avec une barre de ratio interactive, un diagramme circulaire et le détail des calculs.
Exemples Pratiques et Solutions Étape par Étape
Voici 3 exemples de calculs résolus avec les étapes détaillées grâce à ce calculateur :
Saisie 1 Bank with $12B Tier 1, $4B Tier 2, $120B RWA
Saisie 2 Assess if a bank meets the 8% minimum
Saisie 3 How much capital needed for 10% CAR?
Foire Aux Questions
What is the minimum Capital Adequacy Ratio? ▼
Basel III requires a minimum CAR of 8%, with at least 4.5% CET1 and 6% Tier 1. Many regulators impose additional buffers (conservation buffer of 2.5%), bringing the effective minimum to 10.5%.
What is the difference between Tier 1 and Tier 2 capital? ▼
Tier 1 capital (core capital) includes common equity and retained earnings — it absorbs losses while the bank operates. Tier 2 capital (supplementary) includes subordinated debt that absorbs losses only in liquidation.
What are risk-weighted assets? ▼
Risk-weighted assets assign different risk weights to different asset types. Cash has 0% weight, government bonds 0-20%, mortgages 35-50%, and corporate loans 100%. Total RWA = sum of (asset value × risk weight) for all assets.
Why is CAR important for banks? ▼
CAR ensures banks can absorb unexpected losses without becoming insolvent. Higher CAR means more cushion for depositors and the financial system. Banks with low CAR face regulatory restrictions on dividends and growth.
How does a bank improve its CAR? ▼
Banks can raise CAR by issuing new equity, retaining earnings instead of paying dividends, reducing risk-weighted assets (selling risky loans), or securitizing assets to move them off-balance-sheet.