Risk-Based Capital: Sri Lanka’s Experience
Risk-based capital (RBC) represents an amount of capital that, based on an assessment of risks, a company should hold to protect customers against adverse developments. Having an RBC framework can be the way forward for a sustainable industry given its flexibility to adjust to changes in the financial landscape. While each country will have its own model regarding capital adequacy and there is no "one size fits all" model, it is good to share experiences and use these to improve country models.