The Financial Conduct Authority's Principles for Businesses states that a firm must maintain financial resources that are?

The principle that a firm must maintain financial resources that are adequate is rooted in the need for businesses to ensure they can meet their financial obligations and support their ongoing operations. Adequate financial resources imply having sufficient capital and reserves to cover liabilities, manage risks, and safeguard against unforeseen circumstances. This requirement is particularly important in the financial industry, where the stability and confidence in a firm can significantly affect consumers and the overall market.

By necessitating that firms maintain adequate resources, the Financial Conduct Authority promotes the resilience of businesses, ensuring they can withstand financial pressures and continue to operate effectively. This principle helps to protect customers, investors, and the integrity of the financial system as a whole. Thus, the focus on adequacy rather than strict numerical specifications allows firms some level of discretion in how they manage their financial health.