Tier 2

Banking - capital adequacy.

(T2).

Tier 2 capital comprises 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 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).

See also

• AT1
• Basel II
• Basel III
• Capital
• Capital adequacy
• Capital Adequacy Directive
• CET1
• CRD IV
• Equity
• Going concern
• Gone concern
• Subordinated debt
• T2
• Tier 1