Definition ∞ Regulatory capital definition specifies what types of financial resources institutions must hold to absorb losses and meet regulatory capital requirements. This definition is established by financial authorities to ensure banks and other regulated entities maintain sufficient buffers against unexpected risks. It distinguishes between various tiers of capital based on their loss-absorbing capacity. Adherence is non-negotiable for compliance.
Context ∞ In crypto news, the regulatory capital definition is a critical discussion point for banks and financial firms seeking to hold digital assets. Reports highlight ongoing debates among global regulators on how to classify and risk-weight cryptocurrencies for capital purposes. The final definitions will significantly influence institutional engagement with digital asset markets and their risk exposure.
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