Tier 1 Capital: Definition, Components, Ratio, and How It’s Used.
Tier 1 capital refers to a core set of assets that banks are required to hold to cushion against losses. What are the components of core capital? Core capital consists of a bank’s Tier 1 capital, which is composed of the following: – Common stock – Retained earnings – Undistributed profits – Non-cumulative preference shares … Read more