what is regulatory capital
Capital requirement (also known as regulatory capital or capital adequacy) is the amount of capital a bank or other financial institution has to hold as required by its financial regulator.This is usually expressed as a capital adequacy ratio of equity that must be held as a percentage of risk-weighted assets.These requirements are put into place to ensure that these institutions do not take on excess leverage and become insolvent.his is usually expressed as a capital adequacy ratio of equity that must be held as a percentage of risk-weighted assets. These requirements are put into place to ensure that these institutions do not take on excess leverage and become insolvent.