TeachMeFinance.com - explain tangible capital
tangible capital -- OTS defines a thrift institution's tangible capital as outstanding stock plus retained earnings . In 1989, OTS set the minimum tangible capital requirement for savings institutions at 1.5 percent of assets. See core capital and risk-based capital.
core capital -- one of three capital standards established for savings institutions in 1989. The minimum amount of core capital for the soundest institutions is 3 percent of assets. See tangible capital, risk-based capital.
risk-based capital -- one of three capital standards adopted for savings institutions in 1989. The standard is designed to require savings institutions to hold more capital for higher-risk assets. The value of each asset is weighted according to its risk and then capital is calculated at a fixed percent of each risk-weighted asset. The standard adopted in 1989 was 8 percent of risk-weighted assets. See tangible capital and core capital.
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