CAPITAL resources that a company allocates internally to conduct its operations and support its RISKS (including FINANCIAL RISK and OPERATING RISK ). Economic capital , which is a key measure of SOLVENCY, serves to absorb unexpected losses and allow a firm to continue its operations. Also known as MANAGEMENT CAPITAL. See also CAPITAL ALLOCATION , REGULATORY CAPITAL , RISK CAPITAL , TIER 1 CAPITAL , TIER 2 CAPITAL .
Black’s Law Online Dictionary
