A bank covered by the terms of the Basle Agreement can count tier two items as meeting its capital requirements only up to the amount of its tier one capital.

Question

Quizplus · Accepted Answer

Tier two capital can be used to meet a bank's capital requirements under the Basel Accord, but only up to the limit of the bank's tier one capital, ensuring a solid base of core capital before relying on supplementary capital.

A Bank Covered by the Terms of the Basle Agreement