Guide of This Tool
- Enter CET1, AT1, Tier 2, and regulatory deductions.
- Enter credit, market, and operational risk-weighted assets.
- Select a target benchmark or set a custom benchmark.
- Review the highlighted CAR result and supporting metrics.
- Use the stress sliders to test how lower capital or higher RWA affects your adequacy ratio.
Facts of This Tool
- CAR compares total regulatory capital to risk-weighted assets.
- CET1 focuses on the strongest quality capital base.
- Tier 1 includes CET1 plus Additional Tier 1 instruments.
- RWA composition can materially influence capital pressure.
- Stress testing can help reveal how resilient a bank may be under tougher conditions.
About This Tool
This advanced calculator is designed to help users estimate capital adequacy using a Basel-style framework. It combines capital layers, deductions, total risk-weighted assets, benchmark comparison, and stressed scenario analysis in one clean professional interface.
Additional Tips of This Tool
- Always use one consistent currency denomination across all inputs.
- Review CET1 and Tier 1 alongside total CAR for a fuller picture.
- A benchmark shortfall may be addressed through capital raising, retained earnings, or RWA optimization.
- Use the custom target for internal policies or jurisdiction-specific thresholds.
Use Cases of This Tool
- Internal capital planning
- Risk and treasury review
- Board reporting support
- Regulatory training and learning
- Scenario comparison for business growth or balance sheet changes
Examples of This Tool
- Strong capital case: high CET1 and manageable RWA load.
- Tight buffer case: ratio is above minimum but only slightly.
- Growth stress case: expanding RWA compresses CAR even with decent capital.
FAQ
Capital Adequacy Ratio is a solvency metric that compares regulatory capital to risk-weighted assets.
CAR = Total Regulatory Capital ÷ Total Risk-Weighted Assets × 100.
It helps indicate whether an institution has enough capital to absorb losses relative to its risk exposure.
What This Tool Highlights
- Total CAR
- CET1 ratio
- Tier 1 ratio
- Benchmark gap or surplus
- Stressed CAR after capital and RWA shocks
Practical Note
This calculator is excellent for fast planning and analysis. Actual regulatory treatment may differ by jurisdiction, supervisory approach, buffers, instrument eligibility, and transitional rules. It should support decision-making, not replace legal or regulatory advice.
| Feature | Details |
|---|---|
| Price | Free |
| Rendering | Client-Side Rendering |
| Language | JavaScript |
| Paywall | No |
0 Comments