Capital Adequacy Flashcards
1
Q
What is capital adequacy?
A
It seeks to enhance investor protection
The rules seek to ensure a firm always has enough capital to operate
Should it go into liquidation it can cover its liabilities
2
Q
The PRA
A
Enhances financial stability
Promotes safety and soundness of authorised firms
Minimises the impact of their failure
Firms must have “robust strategies, policies, processes and systems” so they can identify, measure, manage and monitor liquidity risk.
