Tier 1

Banking - capital adequacy.

Tier 1 is the highest quality capital.

Contrasted with Tier 2, which is of lower quality.

Tier 1 principally comprises equity, subject to regulatory deductions and the inclusion of some preferred shares and some perpetual bonds.

Tier 2 capital comprises eligible long dated subordinated debt.

See also

• AT1
• Basel II
• Basel III
• Capital
• Capital adequacy
• Capital Adequacy Directive
• CET1
• CRD IV
• Equity
• Subordinated debt
• T2
• Tier 2