Consolidated Basel Framework - definition of capital (CAP)
This standard describes the criteria that bank capital instruments must meet to be eligible to satisfy the Basel capital requirements, as well as necessary regulatory adjustments and transitional arrangements.
Three categories of instruments are permitted, each governed by a single set of criteria that instruments are required to meet before inclusion in the relevant category. These are common Equity Tier 1 (going-concern capital), additional Tier 1 (going-concern capital) and tier 2 Capital (gone-concern capital). Total regulatory capital is the sum of Common Equity Tier 1, Additional Tier 1 and Tier 2 capital, net of regulatory adjustments.