Tier 1 Capital

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DEFINITION of 'Tier 1 Capital'

A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves.

BREAKING DOWN 'Tier 1 Capital'

Equity capital includes instruments that can't be redeemed at the option of the holder.

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RELATED FAQS
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  6. Why is the capital adequacy ratio important to shareholders?

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  7. What are the Basel III rules, and how does it impact my bank investments?

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