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Thin capitalisation: Difference between revisions
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A [[special purpose vehicle]] is just such a company which uses the technique of applying [[limited recourse]] to all of its contractual obligations so that it is [[bankruptcy remote]]. Its capital can be as low as $1000. | A [[special purpose vehicle]] is just such a company which uses the technique of applying [[limited recourse]] to all of its contractual obligations so that it is [[bankruptcy remote]]. Its capital can be as low as $1000. | ||
[[Asset manager]]s also tend to be (comparatively) thinly capitalised (but nothing like as thinly as {{tag|SPV}}s do, as they generally act for the account of the [[fund]]s that they manage, and aren't subject to any regulatory requirements to hold capital. | [[Asset manager]]s also tend to be (comparatively) thinly capitalised (but nothing like as thinly as {{tag|SPV}}s do, as they generally act for the account of the [[fund]]s that they manage, and aren't subject to any regulatory requirements to hold capital. | ||
[[Bank]]s, by contrast, are [[fat capitalisation|fatly capitalised]]. Well, they would be, if there were such a term in common usage. | [[Bank]]s, by contrast, are [[fat capitalisation|fatly capitalised]]. Well, they would be, if there were such a term in common usage. | ||
==See also=== | ==See also=== | ||
*{{tag|regulatory capital}} | *{{tag|regulatory capital}} | ||
*[[Bankruptcy remoteness]] | |||
*[[Limited recourse]] | |||
*[[SPV]] | *[[SPV]] | ||