Regulatory Alerts2021-02-04
Regulatory Capital Structure and Requirements
The Supervisor of Banks issues this directive to define the structure of regulatory capital for banking corporations, comprising Common Equity Tier 1, Additional Tier 1, and Tier 2 capital. The document establishes strict limits on capital composition, such as capping Tier 2 capital at 100% of Tier 1, and mandates specific deductions for intangibles, deferred tax assets, and investments in financial corporations. It further details the criteria for classifying capital instruments, threshold deductions, and risk weighting requirements for various exposures to ensure adequate loss absorbency.
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