What is gross risk weighted assets?

Gross Risk-Weighted Assets (RWAs) represent the total value of a bank's assets, adjusted for their associated credit, market, and operational risk. Each asset is weighted according to its risk profile, with riskier assets receiving higher weights. This metric is essential for determining the capital requirements a bank must hold to safeguard against potential losses, as mandated by regulatory frameworks like Basel III. Essentially, RWAs help assess the risk level of a bank's asset portfolio in relation to its capital adequacy.