Bank’s capital - Belobrov Angela

Extras din document

Topic 2. Banking is undoubtedly one of the most regulated industries in the world, and the rules on bank capital are one of the most prominent aspects of such regulation. This prominence results from the central role that banks play in financial intermediation, the importance of bank capital for bank soundness and the efforts of the international community to adopt common bank capital standards. 1. The concept of banking resources (resources of a bank\bank’s resources) is the totality of the resources the bank disposes of and used by the bank in crediting and other operations. The drawback is that sources of formation of such resources are not indicated. All the bank’s resources are classified in:  Own resources- a small part of banking resources formed from the shares, reserve funds and special funds.  Attracted resources – over 90% of the liabilities of the bank are deposit resources and non deposit resources. Deposits of public in the form of saving, current accounts, are the main dopsit sources of a bank. Banks generally rely on such deposit sources of funds also known as public deposit. But when bank require large amount of funds to face the problem of liquidity they borrow funds from other sources like money market this is termed as non deposit source of fund. Deposit resources have a personal character because clients are those who launch the initiative to participate with the money, while non deposit resources are impersonal since they are purchased on the market and the initiative belongs to the bank.