A unifying approach

Economic capital has the potential to make financial services firms more risk-aware in their capital management, enabling investors and regulators to easily compare financial strength and profitability across business lines and sectors. By Vaishnavi Srinivasan and Pradip Tapadar


Financial services firms are in the business of accepting risk. To be able to fulfil this role, they must understand the risks involved and put in place adequate measures to mitigate them. Traditionally, the amount of capital has been prescriptive in nature and set out by the regulators. With the advent of modern risk management techniques, regulators are moving towards a risk-based capital approach, with different regulations for banks (Basel II) and insurance firms (Solvency II).

However, to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here