The idea of Risk Weighted Assets is to determine the Capital needs of a bank based on the level of riskiness of the assets that the bank possesses . If a bank holds riskier assets than Capital requirement will also be higher and vice versa. It is calculated simply by multiplying the asset with a [...]
Total Liabilities are the legal financial obligations that need to be fulfilled by a bank or credit union. Total liabilities are the sum of current and non-current liabilities of a financial institution and are expressed as: Total Liabilities = Current Liabilities + Non-Current Liabilities Where in current liabilities include the debt or financial obligations which [...]
Common stock is a type of equity (ownership) in a bank (company). Common stock has voting powers and the right to elect the Board of Directors (in some cases there are different classes of common stock: voting and non-voting). In the event of bankruptcy, common stock sits behind preferred stock, debenture holders, and creditors when [...]
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