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2) Under regulatory capital requirements, banks must maintain various measures of equity above certain percentages of corresponding measures of assets. The intent of capital requirements

2) Under regulatory capital requirements, banks must maintain various measures of equity above certain percentages of corresponding measures of assets. The intent of capital requirements is to ensure that banks are and will remain solvent, so that they are above to pay off their liabilities as they come due. Currently there are three main capital ratios for which requirement exists. Explain any two of them. (2.5 Marks)

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