What is Additional Tier Capital?
Additional Tier Capital A class of regulatory capital, recognized under Basel III and IV, that consists of instruments and reserves other than common equity, including certain subordinated debt and hybrid securities, used to absorb losses and support a bank’s resilience beyond Common Equity Tier 1.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Additional Tier Capital” Used in Practice?
Under Basel III, banks must maintain a minimum amount of Additional Tier Capital to enhance loss-absorbing capacity during periods of stress.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Additional Tier Capital?
A class of regulatory capital, recognized under Basel III and IV, that consists of instruments and reserves other than common equity, including certain subordinated debt and hybrid securities, used to absorb losses and support a bank’s resilience beyond Common Equity Tier 1.
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