Invertext Online Technical Dictionary

free capital


fondos propios disponibles

Definition 1

The part of the equity of a bank that is not subject to statutory capital requirements.

Source: Invertext

Context: 1st Context. A central aspect of the working hypothesis is the allocation to the PE of “free capital”, which the paper defines as contributions of equity by shareholders and retained profits. It also refers to tier 1 capital and tier 2 capital and in general assumes that all tier 1 capital is free capital whereas all tier 2 capital is not free capital. ( 2nd Context. He [Alfredo Sáenz, CEO of Banco Santander] confirmed that Santander intended to raise its core capital ratio from 6.31 per cent at the end of September to at least 7 per cent next year, partly by generating free capital from profits and [partly] by reducing the assets of its US and UK operations. (Financial Times 29/10/2008)

Appears in the following subjects

Stock Markets, Banking