why is capital position important for banks
Must-know: Why capital in banking is important. By Saul Perez â¢ Sep 5, 2014 9:16 am EDT. Capitalâs importance. Now that you have a good idea about what capital is and the types of capital, you must be wondering why capital is so important.Weâve stated earlier that capital is used to absorb shocks during a bankâs worst periods.Capital is important because itâs that part of an asset which can be used to repay its depositors, customers, and other claimants in case the bank doesnât have enough liquidity due to losses it suffered in its operations.Capital doesnât include any claims by bank equity holders. Enlarge Graph.ust-know: Why capital in banking is important. By Saul Perez â¢ Sep 5, 2014 9:16 am EDT. Capitalâs importance. Now that you have a good idea about what capital is and the types of capital, you must be wondering why capital is so important.