Economics A-Level
Capital ratio
What Capital ratio means in Economics A-Level, as defined for AQA.
Definition of Capital ratio
Check what you remember
Read the wording for your board, then hide it and explain Capital ratio in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
A measure of a bank's core equity capital relative to its risk-weighted assets, acting as a financial buffer against unexpected losses such as widespread loan defaults.
Topics that use Capital ratio
- The regulation of the financial system (AQA A-Level)
Related terms
- Bank run
- Consumer protection
- Financial stability
- Insolvency
- Liquidity ratio
- Macro-prudential policy
- Macroprudential regulation
- Maturity transformation
Using Capital ratio in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
Practise Economics questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
Start free
All Economics A-Level termsA week of Premium from your first lesson · Then the free plan continues · No card, no charge