# Irish Banks Capital Requirement / Adequacy Ration



## breakonthru (28 Jun 2013)

Hi all,

Can anybody point me to the URL or post what the capital to loans ratio the Irish Banks are meant to have as advised by the Irish Central Bank?


Is this kept in check by the Central Bank or self-regulated by each bank?


The term 'Capital Requirement' on Wikipedia throws up the following explanation..


"*Capital requirement* (also known as *dancing Regulatory capital* or *Capital adequacy*) is the amount of capital a bank or other financial institution has to hold as required by its financial regulator. This is in the context of fractional reserve banking and is usually expressed as a capital adequacy ratio of liquid assets that must be held compared to the amount of money that is lent out. These requirements are put into place to ensure that these institutions are not participating or holding investments that increase the risk of default and that they have enough capital to sustain operating losses while still honoring withdrawals".


This is all interesting to me. Over at http://www.positivemoney.org/ we see that creating money is creating debt. Indeed 97% debt versus only 3% cash reserves in the banks.


Cheers!


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