Types of Tier 2 or Supplementary Capital as per Basel Capital Adequacy Norms. #ChartAcc
Friday, January 10, 2014
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ChartAcc.com - Tier 2 capital has two types as follows:
For more on Basel click here.
- Upper Tier 2 - It includes Debt which is:
- Perpetual (senior to preferred capital and equity)
- Deferrable and cumulative coupons
- Interest and principal can be written down
- Lower Tier 2 -
- cheap for banks to issue
- coupons not deferrable without triggering default
- subordinated debt with a maturity of a minimum of 10 years.
For more on Basel click here.
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