Under Basel III, the total capital requirement is set at a minimum of eight percent of risk-weighted assets, with Common Equity Tier 1 (CET1), the highest quality capital, required to comprise at least 4.5 percent of risk-weighted assets. In 2024, JPMorgan Chase had the highest level of...
In simple terms it is the good stuff on the balance sheet – retained earnings and common equity, which are then divided by risk weighted assets (RWA). If the bank has a large enough capital cushion, as shown by the ratio, the theory is that it will be able to survive an economic do...