Core Capital


DEFINITION of 'Core Capital'

The minimum amount of capital that a thrift bank, such as a savings bank or savings and loan company, must have on hand in order to comply with Federal Home Loan Bank regulations. Core capital consists of equity capital and declared reserves. The minimum requirement was put in place to ensure that consumers are protected when creating financial accounts.

BREAKING DOWN 'Core Capital'

Following the financial crisis of 2008, regulators began focusing heavily on banks' Tier 1 capital, which consists of core capital, but can also include nonredeemable, noncumulative preferred equity. This is more stringent than normal capital ratios, which can also include Tier 2, and lesser-quality capital.

  1. Thrift

    Thrifts are savings and loans associations. Thrifts also refer ...
  2. Tier 1 Capital

    A term used to describe the capital adequacy of a bank. Tier ...
  3. Tier 2 Capital

    One of two categories by which a bank's capital is divided. Tier ...
  4. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
  5. Federal Home Loan Bank System - ...

    An organization created by the Federal Home Loan Bank Act of ...
  6. Capital Requirement

    The standardized requirements in place for banks and other depository ...
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