The concept of Economic Capital Modeling involves not only measuring and optimizing capital resources already existing within a bank, but also determining the amount of capital required to offset the various risks therein.

Economic Capital is the cornerstone for RAROC calculations, which are used to determine the risk adjusted financial performance of the bank and to provide a consistent view of profitability across all businesses. At Aptivaa, we provide two separate frameworks, both for estimation of Economic Capital and RAROC.