WHAT IS A TIER ONE BANK? BY GOLDILOCKS, 5 JULY

 GOLDILOCKS

WHAT IS A TIER ONE BANK?

"Banking regulations known as the Basel Accords require banks to have different types of capital on hand. These liquid and cash assets balance out the risk-weighted assets that banks hold. This increases banks' stability, which increases the stability of the overall financial system. "

"Tier 1 capital is the primary funding source of the bank. Typically, it holds nearly all of the bank's accumulated funds. These funds are generated specifically to support banks when losses are absorbed so that regular business functions do not have to be shut down.  Under Basel III, the minimum tier 1 capital ratio is 10.5%."

"What Do the Basel Accords Do?"

"The Basel Accords are international banking regulations that ensure banks have enough capital on hand both to meet their obligations and absorb any unexpected losses. They are set by the Basel Committee on Bank Supervision (BCBS)."

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