# Minimum equity ratio

- Canonical URL: https://www.gerhardmerk.de/minimum-equity-ratio
- Post ID: 592880
- Modified: 2023-07-25T21:03:23+00:00
- Language: en

## Definition

The following applies to a bank according to Basel II requires a minimum core capital ratio of four percent. During the financial crisis that followed the subprime crisis, there were calls to increase this rate to eight percent. In the ensuing debate, however, it emerged that it is not so much specific percentages as the components of liquidity buffers that are crucial to a bank's survival. Therefore, as of 2012, institutions in the EU must hold at least half of their equity in common shares and profits (= hard equity). - See Basel-III, capital, equity, hard, capital adequacy, own funds, insolvency, capital, capital buffers, countercyclical, liquidity crisis plan, stabilizers, automatic, stop-gap strategy, backing. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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