The Japanese notice writes "リスク・アセットの額" (the amount of risk-weighted assets), and the FSA overview writes "リスクアセット". In the notice's formula for the international standard, the total credit risk-weighted assets are added to the total market risk equivalent and the total operational risk equivalent, each divided by 8%1. However, a bank that meets the conditions in Article 4 of the notice may leave out the market risk equivalent2.

Consider a hypothetical example of a 100 million yen loan to a company with a risk weight of 100%. The RWA is 100 million yen. At a risk weight of 20%, it is 20 million yen. Multiplying by 8%, the minimum of the total capital ratio under the international standard, gives the minimum capital needed: 8 million yen at 100% and 1.6 million yen at 20%3.

Notes

  1. Financial Services Agency, "銀行法第十四条の二の規定に基づき、銀行がその保有する資産等に照らし自己資本の充実の状況が適当であるかどうかを判断するための基準" (Standards for determining whether a bank's capital adequacy is appropriate in light of the assets it holds, under Article 14-2 of the Banking Act, our translation; FSA Notice No. 19 of 2006), Article 2 (pages 26–27 of the full text) (in Japanese). ↩

  2. The same notice, Article 4 (page 30 of the FSA consolidated version). Where the conditions set for each bank category are met, the market risk equivalent divided by 8% may be left out of the formula. ↩

  3. Financial Services Agency, "バーゼル規制の概要" (Overview of the Basel framework, our translation) (August 2026), page 12. The example of a 100 million yen loan at a 100% risk weight needing 8 million yen of capital. The 1.6 million yen at 20% is calculated the same way (the 20% is from the table in Article 65 of the notice) (in Japanese). ↩