on Capital Requirement The capital requirements for banks under Basel 3 can be summarised as (per cent of risk weighted assets): Minimum Conservation buffer Minimum plus conservation buffer Common equity Tier 1 6 4.5 2.5 7.0 Counter-cyclical buffer range 0-2.5 2. 8.5 Total capital 8 10.5 Identify the following: 1. In normal times (when there is no financial stress) what is the minimum common equity to risk weighted asset ratio? In times of financial stress what is the minimum common equity to risk weighted assets ratio? 3. Under Basel 3 and normal times (where there is no financial stress) what is the additional amount of total capital that banks have to hold in relation to risk weighted assets compared to Basel 2? 4. Where a regulatory authority applies the full counter-cyclical buffer to banks because credit growth is expanding rapidly, what is the minimum common equity to risk weighted assets that banks will be expected to meet? (515)