TERMIUM Plus®

The Government of Canada’s terminology and linguistic data bank.

economic capital [1 record]

Filter results by subject field Alphabetical list of terms

Filter results by subject field

Alphabetical list of terms

Record 1 2002-05-24

English

Subject field(s)
  • Trade
  • Financial and Budgetary Management
DEF

The amount of capital that a transaction or business requires to support the economic risks it faces to a specified solvency standard.

CONT

Economic capital requirements for credit risk means the capital needed for a portfolio such that the chance for credit losses exceed capital is no more than a specified small probability. In many circumstances, economic capital would be the same as that needed to finance an asset or portfolio in a free-market transaction with informed counterparties.

OBS

The theoretical framework for relating risk to the amount of capital a financial institution needs to hold is based on Merton's model of default.

French

Domaine(s)
  • Commerce
  • Gestion budgétaire et financière
DEF

Somme d'argent requis lors d'une transaction ou nécessaire à une entreprise afin de couvrir les risques économiques et ainsi satisfaire aux normes de solvabilité.

CONT

Le capital économique correspond au capital (juste) nécessaire, par exemple au niveau d'une ligne de métier ou de l'organisation dans son ensemble, pour absorber des pertes exceptionnelles ou inattendues résultant des risques encourus au niveau de l'entité considérée.

Spanish

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TERMIUM Plus®, the Government of Canada's terminology and linguistic data bank
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