Nonriskweighted

Nonriskweighted is a term used in finance to describe assets or exposures that have not been adjusted by risk weights for regulatory or internal risk management purposes. In banking regulation, the core concept is risk-weighted assets (RWA), which apply weights to different asset classes to reflect credit, market, and operational risk. Nonriskweighted assets, by contrast, represent the gross or nominal exposure on the balance sheet before any weighting is applied.

In practice, nonriskweighted figures can appear in internal reports or analytical exercises to show the scale of total exposures without regard to riskiness. They may include cash, loans, securities, and other assets recorded at face value. Because they do not account for risk, nonriskweighted totals can be useful for understanding size and concentration, but they are not a substitute for RWA in determining capital requirements.

Regulatory frameworks such as Basel III require capital adequacy calculations to be based on RWAs rather than nonriskweighted totals. Banks often report both measures to provide a fuller picture of risk and capital adequacy: RWAs for regulatory requirements, and nonriskweighted exposures for broader risk assessment, liquidity planning, and stress testing. However, reliance on nonriskweighted figures alone can be misleading for evaluating financial strength or solvency.

See also: risk-weighted assets, Basel III, capital adequacy ratio, exposure at default, expected credit loss.