Multiple choice

Which of the following fall(s) under Tier II capital?

  1. Paid up capital

  2. Free reserves

  3. General provisions and loan loss reserves

  4. Innovative perpetual debt instruments

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Tier 2 capital represents "supplementary capital" such as undisclosed reserves, revaluation reserves, general loan-loss reserves, hybrid (debt/equity) capital instruments, and subordinated debt.