What is Core Capital?

China: "Administrative Measures on Capital Adequacy Ratio of Commercial Banks"

Core capital

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China: "Commercial Bank

The Basel Accord separates the capital of commercial banks into "

According to the Basel Accord, the capital adequacy ratio required by commercial banks in China is: the ratio of total capital including core capital and subsidiary capital to total risk-weighted assets must not be less than 8%, of which total core capital and total risk-weighted assets The ratio is not less than 6%. Core capital includes paid-in capital, capital reserves, surplus reserves, and undistributed profits; subsidiary capital includes loan bad debt provisions, bad debt provisions, investment risk provisions, and long-term bonds of more than five years.

Core capital includes paid-in capital, capital accumulation fund, surplus accumulation fund and undistributed profits. Subsidiary capital refers to loan reserve. When calculating the total capital, the following capital shall be deducted from the core capital of the commercial bank plus the subsidiary capital:

(1) Expenditure on purchasing foreign exchange capital;

(2) Investments in the capital of banks and financial subsidiaries that are not consolidated;

(3) Investments in the capital of other banks and financial institutions;

(4) The portion of bad debt losses that has not been written off.