Tier 2 capital consists of an investment reserve account, subordinated debt, hybrid capital instruments, loss reserves, revaluation reserves, undisclosed reserves and general provisions.You can read about the Basel III Norms – Regulations by the Basel Committee on Banking Supervision in the given link.
Tier 2 capital was standardized by the Basel I accord. Tier 2 capital is also known as the supplementary capital. Banks have to keep part of their required reserves, and this second layer of capital is known as the Tier 2 capital.
Further readings:
|
Related Links |
|
|
UPSC Mains General Studies Paper-III Strategy, Syllabus & Structure |
|
Comments