Pääomavaatimuslaskennassa

Pääomavaatimuslaskenta is a Finnish term that translates to "capital requirement calculation." It refers to the process by which financial institutions, particularly banks, determine the amount of capital they must hold to cover potential losses. This capital acts as a buffer, ensuring the institution's solvency and its ability to withstand financial shocks.

The core principle behind capital requirement calculation is risk. Different assets and activities carry varying levels of risk, and institutions are required to hold more capital against riskier exposures. Regulatory frameworks, such as Basel III, provide detailed guidelines for these calculations. These frameworks typically consider several types of risk: credit risk (the risk of borrowers defaulting), market risk (the risk of losses due to changes in market prices), and operational risk (the risk of losses arising from inadequate or failed internal processes, people, and systems, or from external events).

Institutions can use different approaches to calculate their capital requirements. Standardized approaches rely on prescribed risk weights assigned by regulators. Internal ratings-based (IRB) approaches allow sophisticated institutions to use their own internal models to estimate risk parameters, subject to regulatory approval. The outcome of the capital requirement calculation dictates the minimum amount of capital, often expressed as a ratio of capital to risk-weighted assets, that the institution must maintain. This ensures financial stability and protects depositors and the wider financial system.