Which of the following would be an example of Tier 1 capital?
A)Subordinated debt capital instruments with an original maturity of at least 5 years
B)Allowance for loan and lease losses
C)Minority interest in the equity accounts of consolidated subsidiaries
D)Intermediate-term preferred stock
E)All of the options are correct.

Question

Quizplus · Accepted Answer

Tier 1 capital is primarily composed of common equity, retained earnings, and certain types of preferred stock and minority interests in the equity of subsidiaries that are not wholly owned. Among the options given, minority interest in the equity accounts of consolidated subsidiaries (C) fits this description. Subordinated debt and intermediate-term preferred stock are typically considered Tier 2 capital, not Tier 1. The allowance for loan and lease losses is a reserve against losses and is not considered capital.

Which of the Following Would Be an Example of Tier