Tier 1 capital

Description

Tier 1 capital is the core measure of a bank’s financial strength from a regulator’s point of view. It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings),but may also include non-redeemable non-cumulative preferred stock. The Tier 1 capital ratio is the ratio of a bank’s core equity capital to its total risk-weighted assets

Related formulas

Variables

T1Tier 1 capital (dimensionless)
CECBank's core equity capital (dimensionless)
RWATotal risk-weighted assets (dimensionless)