Regulatory-defined capital and required leverage ratios are based in whole or in part on

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Regulatory-defined capital and required leverage ratios are based on book value accounting concepts. Book value accounting measures the value of an asset or liability using the historical cost or the cost paid to acquire the asset, less any depreciation or amortization. This is different from market value accounting which is based on the current market value of the asset or liability. The net worth concept and economic meaning of capital are both important considerations when determining regulatory-defined capital, but they are not the basis for the ratios.

Regulatory-Defined Capital and Required Leverage Ratios Are Based in Whole