Tier 2: Difference between revisions
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Revision as of 20:49, 29 January 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).
