22 lines
708 B
Markdown
22 lines
708 B
Markdown
<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-2-chapter-02 -->
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# Bank Capital Adequacy
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## Definition
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The sufficiency of a bank's capital relative to its risks and obligations, which determines its ability to absorb losses and maintain operations during periods of stress. Adequate capital is essential for banking stability.
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## Source Chapter
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Book II, Chapter 2
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## Context
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Smith examines the importance of adequate capital for banking stability, showing how insufficient capital can lead to bank failure and broader economic disruption. He analyses the relationship between capital, risk, and stability.
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## Economic Domain
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Regulation
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---
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