Tier 1

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1. Banking - capital adequacy


Tier 1 is the highest quality capital.

Contrasted with Tier 2, which is of lower quality.

Tier 1 is sometimes known as 'going concern' loss absorbing capital.

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

Tier 1 capital is classified as Common Equity Tier 1 (CET1) or Additional Tier 1 (AT1), CET1 having superior loss-absorbing quality.


Abbreviation for Tier 1 executive.

See also