In finance, mainly for financial services firms, economic capital (ecap) is the amount of risk capital, assessed on a realistic basis, which a firm requires to cover the risks that it is running or collecting as a going concern, such as market risk, credit risk, legal risk, and operational risk. It is the amount of money that is needed to secure survival in a worst-case scenario. Firms and financial services regulators should then aim to hold risk capital of an amount equal at least to economic capital. Typically, economic capital is calculated by determining the amount of capital that the firm needs to ensure that its realistic balance sheet stays solvent over a certain time period with a pre-specified probability. Therefore, economic capital is often calculated as value at risk. The balance sheet, in this case, would be prepared showing market value (rather than book value) of assets and liabilities. The first accounts of economic capital date back to the ancient Phoenicians, who took rudimentary tallies of frequency and severity of illnesses among rural farmers to gain an intuition of expected losses in productivity. These calculations were advanced by correlations to climate change, political outbreaks, and birth rate change. The concept of economic capital differs from regulatory capital in the sense that regulatory capital is the mandatory capital the regulators require to be maintained while economic capital is the best estimate of required capital that financial institutions use internally to manage their own risk and to allocate the cost of maintaining regulatory capital among different units within the organization. (Wikipedia).
Why GDP Is Overrated & Nobody Should Care About It!
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12. Real Estate Finance and its Vulnerability to Crisis
Financial Markets (ECON 252) Real Estate is the biggest asset class and of great importance for both individuals and institutional investors. An array of economic and psychological factors impact real estate investment decisions and the public has changing ideas of real estate as a prof
From playlist Financial Markets (2008) with Robert Shiller
#EconShorts: Scarcity- Macro 1.1
A quick introduction to economics and key concepts like scarcity, the factors of production, physical capital, human capital, macroeconomics, and microeconomics. Need help? Check out the Ultimate Review Packet www.ultimatereviewpacket.com My New TikTok https://www.tiktok.com/@jacobclif
From playlist #EconShorts
Types of Assets: Financial, Tangible, and Intangible
How do people get rich? Rather than having very high-paying jobs, wealth is more easily accumulated through ownership of assets. This is anything of value that can be converted into money. Of course we know about assets like houses and other properties, or even expensive collectibles, but
From playlist Economics
Financial Markets (ECON 252) The stock market is the information center for the corporate sector. It represents individuals' ownership in publicly-held corporations. Although corporations have a variety of stakeholders, the shareholders of a for-profit corporation are central since the
From playlist Financial Markets (2008) with Robert Shiller
The Most Important Economic Schools of Thought | Economics Explained
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Macro Unit 2.6A- Nominal and Real GDP Advanced Placement Macroeconomics
In this video I explain the difference between nominal and real GDP. Don't forget that Real GDP is adjusted for inflation. Please keep in mind that these clips are not designed to teach you the key concepts. These videos are a review tool to help you better understand what you learned in c
From playlist Macro Unit 2: Economic Indicators and the Business Cycle
Itβs sometimes easy to think that weβve run out of stuff to make and sell one another. Far from it: Capitalism is still very undeveloped. Weβre only at its very dawn. If you like our films take a look at our shop (we ship worldwide): http://www.theschooloflife.com/shop/all/ Please subs
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Capital vs. consumer goods and economic growth | Microeconomics | Khan Academy
In this video examine the tradeoff a country faces between allocating its resources towards capital goods or consumer goods, and the impact the country's decision will have on economic growth today and in the future. Microeconomics on Khan Academy: Microeconomics is all about how individu
From playlist Microeconomics and Macroeconomics
FRM: Risk-adjusted return on capital (RAROC)
RAROC is a risk-adjusted performance measure (RAPM): risk-adjusted return divided by economic capital (i.e., the capital reserved to cover unexpected losses). For more financial risk videos, visit our website! http://www.bionicturtle.com
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The aggregate production function and growth | APβ Macroeconomics | Khan Academy
This video discusses how economists measure the total factor productivity, capital, and human capital for an aggregate production function. Practice this yourself on Khan Academy right now: https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/ap-long-run-consequences-of
From playlist Long-run consequences of stabilization policies | AP Macroeconomics | Khan Academy
Karl Marx - From Socrates to Sartre (1979)
Thelma Z. Lavine delivers a few lectures on the life and thought of Karl Marx as part of a televised lecture series called 'From Socrates to Sartre, A Historical Introduction to Philosophy'. Note, the music has been edited out. 00:00 The Young Hegelian 28:09 Alienated Man 56:09 The Confli
From playlist Social & Political Philosophy
An Economic History of the World Since 1400 | Self-Interest, Survival, and History The Great Courses
Learn more about this course and sign up for a FREE trial of The Great Courses Plus here: https://wondrium.com/youtube/lp/t2/generic?utm_source=Video&utm_medium=Youtube&utm_campaign=149570 Economics has, in many regards, created the world. Not only is it the process through which societie
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Four factors of production | AP Microeconomics | Khan Academy
Keep going! Check out the next lesson and practice what youβre learning: https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/basic-economics-concepts-macro/introduction-to-the-economic-way-of-thinking-macro/v/normative-and-positive-statements Economists traditionally di
From playlist Intro to Economics
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Teachers! I created NEW worksheets for all my EconMovies episodes and for all the Crash Course Economics episodes. If you want to learn more about these worksheets and get some samples, fill out this form: https://forms.gle/1XajQCpkmcdw3Spx5 EconMovies explain economic concepts through mo
From playlist Microeconomics Unit 1: Basic Economic Concepts
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History of Economic Theory by Dr. Shivakumar, Department of Humanities and Social Sciences IIT Madras, For more details on NPTEL visit http://nptel.iitm.ac.in
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Why The Gulf States Need To Keep Building Big Dumb Mega Projects | Economics Explained
Take advantage of this special offer you can only get on my channel. To start your 7-day trial today go to https://trends.co/economicsexplained/ Saudi Arabia, Qatar, the UAE and other oil rich Middle Eastern states have announced plans to collectively invest trillions of dollars in new m
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Mod-01 Lec-32 Transaction cost and Economic Anthropology approaches
History of Economic Theory by Dr. Shivakumar, Department of Humanities and Social Sciences IIT Madras, For more details on NPTEL visit http://nptel.iitm.ac.in
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1. Exploding Worlds and Course Introduction
Capitalism: Success, Crisis and Reform (PLSC 270) Professor Rae introduces the concept of capital as accumulated wealth used to produce more wealth. Questions about what constitutes capital are posed and discussed. The biggest story in recent economic history is the substitution of labo
From playlist Capitalism: Success, Crisis and Reform with Douglas W. Rae