Limits on the value of the assets that commercial banks can acquire relative to their capital is known as

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Capital requirements limit the assets that commercial banks can acquire in relation to their capital. This is done to ensure that banks maintain a sufficient level of capital relative to their risk exposure, thereby reducing the likelihood of insolvency and financial instability. Equity requirements, on the other hand, refer to the proportion of a bank's capital that is invested in equity, rather than debt or other financial assets. Required reserves are the minimum amount of cash or other liquid assets that banks must hold in reserve, as mandated by central banks. Asset requirements refer to regulations that limit the types or quality of assets that banks can hold.

Limits on the Value of the Assets That Commercial Banks