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Tier 1 Capital

Is the amount of capital that banks need to hold to comply withe BASLE capital adequacy requirements. This capital is the core measure of a bank's financial strength from a regulator's point of view. It is composed of core capital, which consists primarily of common stock and disclosed reserves. According to the current version of BASLE (BASLE II) banks must hold at least 50% of the 8% capital in tier 1 capital.

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