# Equity capital (own resources)

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- Post ID: 592905
- Modified: 2023-07-25T21:00:41+00:00
- Language: en

## Definition

In the case of a bank, basically the sum of - core capital (= paid-in capital, open reserves including the liability reserve, fund for general banking risks) and - supplementary capital (= hidden reserves, participation capital with an obligation to pay dividends in arrears, subordinated capital, revaluation reserve [available-for-sale portfolio], liability surcharge). - In Germany, according to Section 10 of the German Banking Act, the "modified available capital" to be calculated according to a specific approach; see this in the Deutsche Bundesbank Monthly Report of December 2006, p. 73. - In EU law, in Article 56 et seq. of Directive 2006/48/EC of the European Parliament and of the Council of June 14, 2006 relating to the taking up and pursuit of the business of credit institutions (recast), the concept of own funds is explained broadly and with reference to other Community law sources. - See Basel III, profit, equity, deposits, borrowed funds, capital, Capital Requirements Regulation, capital buffer, countercyclical, core capital, leverage, prudential filter, ranking theory, stabilizers, automatic, Tier 1, ultimate factoring, waiver rule, mandatory convertible bond. - Cf. BaFin Annual Report 2005, p. 108 (risk buffer function of own funds; unrealized gains are only to be included in supplementary capital up to 45 percent), Deutsche Bundesbank Monthly Report of December 2006, p. 69 ff. (implementation of Basel II capital regulations in German law), BaFin Annual Report 2009, p. 48 ff. (new supervisory regulations; Tier III capital to be abolished), Deutsche Bundesbank Monthly Report of June 2013, p. 57 ff. (definition of own funds under the Capital Requirements Regulation; new requirements for the quantity and quality of own funds; overviews). 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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