Adjusted Capital Ratio

Ratio of adjusted Capital to total assets, used in computing Capital Adequacy. A bank's adjusted capital includes Loan Loss Reserves for bad debt and securities gains or losses that are charged to earnings, less loans classified as Doubtful Loans or Loss. The risk-adjusted capital guidelines, adopted by banking regulators in 1988, are aimed at developing uniform bank capital guidelines. See also Capital Adequacy; Risk-Based Capital.