Tier Two capital for a bank, under the terms of the Basle Agreement includes all of the following items except one. What item is not included in Tier Two capital?

Question

Quizplus · Accepted Answer

Retained earnings are considered part of Tier One capital, not Tier Two. Tier One capital is the core capital of a bank, including equity capital and disclosed reserves, whereas Tier Two capital is supplementary capital including items such as subordinated debt and loan-loss reserves.

Tier Two Capital for a Bank, Under the Terms of the Basle