Economic capital
- nicholasyeo8
- Aug 11, 2020
- 1 min read
Economic capital is the market value of assets minus fair value of liabilities. Used in practice as a risk-adjusted capital measure; specifically, the amount of capital required to meet an explicit solvency constraint (e.g., a certain probability of ruin). [Source: Casualty Actuarial Society (CAS) Overview of Enterprise Risk Management]
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