Search: insolvency

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1–3 of 3 collapsed search results for insolvency

RBA Glossary definition for insolvency

insolvency – A situation where an entity has insufficient assets to cover the value of its liabilities, resulting in an inability to meet its financial obligations as they fall due.

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A Contingent Claim Analysis of Risk-based Capital Standards for Banks

1 Sep 1992 RDP 9210
Mark Levonian and Sarah Kendall
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1992/9210.html

Introduction

1 Sep 1992 RDP 9210
Mark Levonian and Sarah Kendall
Like Kim and Santomero we derive standards that bound the probability of bank insolvency or failure; we refer to these as failure-probability or “FP” rules. ... For example, an FP rule treats all bank insolvencies as equally costly, whereas an LV
https://www.rba.gov.au/publications/rdp/1992/9210/introduction.html

Two Risk-Based Capital Rules

1 Sep 1992 RDP 9210
Mark Levonian and Sarah Kendall
rule. The difference arises because the FP rule weights all insolvency outcomes equally, while the LV rule gives greater weight to outcomes entailing larger losses for the deposit guarantor.
https://www.rba.gov.au/publications/rdp/1992/9210/two-risk-based-capital-rules.html