Capital structure refers to the composition of a company's capital, particularly the ratio of equity to debt. It is a critical factor in assessing a company's financial stability and risk profile. A balanced capital structure can help optimize financing costs and enhance resilience to economic fluctuations.
The capital structure is of great importance under the new Standardised Credit Risk Approach (SCRA) of CRR III: it directly influences the calculation of Risk-Weighted Assets (RWA) and thus the required capital requirements.
