total capital


The measure of a bank's qualifying capital in the calculation of its risk based capital reserves. The calculation for total capital is Tier 1 equity capital, consisting of common and qualifying preferred stocks, plus Tier 2 capital, made up of subordinated debt, loan losses and preferred stock not counted in Tier 1 capital.

Use total capital in a sentence

  • The bank was interesting and I decided to ask them what their total capital was, which took them by complete surprise.

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  • While evaluating the companies request for a loan, the bank took in to account the total capital the company had to determine the viability of their stocks.

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  • The bank's total capital had been steadily declining for several years in a row, disqualifying the institution from a government bailout.

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