Tier 2: Difference between revisions
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''Banking - capital adequacy | ''Banking - capital adequacy'' | ||
(T2). | (T2). | ||
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Tier 2 capital includes eligible long dated subordinated debt and certain hybrid instruments. | Tier 2 capital includes eligible long dated subordinated debt and certain hybrid instruments. | ||
Tier 2 is of lower loss-absorbing quality than Tier 1 capital, and its eligible amount for capital adequacy calculation purposes is restricted. | Tier 2 is of lower loss-absorbing quality than Tier 1 capital, and its eligible amount for capital adequacy calculation purposes is restricted accordingly. | ||
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== See also == | == See also == | ||
* [[ | * [[Additional Tier 1]] (AT1) | ||
* [[Basel II]] | * [[Basel II]] | ||
* [[Basel III]] | * [[Basel III]] | ||
* [[Capital]] | * [[Capital]] | ||
* [[Capital adequacy]] | * [[Capital adequacy]] | ||
* [[Capital | * [[Capital Requirements Directive]] | ||
* [[ | * [[Common Equity Tier 1]] (CET1) | ||
* [[CRD IV]] | * [[CRD IV]] | ||
* [[Equity]] | * [[Equity]] | ||
| Line 27: | Line 27: | ||
* [[Hybrid]] | * [[Hybrid]] | ||
* [[Subordinated debt]] | * [[Subordinated debt]] | ||
* [[Tier 1]] | * [[Tier 1]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
Latest revision as of 17:54, 25 June 2022
Banking - capital adequacy
(T2).
Tier 2 capital includes eligible long dated subordinated debt and certain hybrid instruments.
Tier 2 is of lower loss-absorbing quality than Tier 1 capital, and its eligible amount for capital adequacy calculation purposes is restricted accordingly.
Tier 2 is sometimes known as 'gone concern' loss absorbing capital.
It is generally loss-absorbing only when a bank has reached the point of non-viability (PONV).
