Bank Capital

Bank capital is simply the net worth of a bank.

Net worth is the bank's assets minus the bank's liabilities, like any net worth calculation. The asset portion of a bank's capital includes cash, government securities and interest-earning loans like mortgages (paid to the bank), letters of credit and inter-bank loans. Liabilities include loans, accounts payable, mortgages (owed by the bank), deferred revenues and accrued expenses.