Total capital,
Definition of Total capital:
The measure of a banks 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.
How to use Total capital in a sentence?
- The banks total capital had been steadily declining for several years in a row, disqualifying the institution from a government bailout.
- 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.
- The bank was interesting and I decided to ask them what their total capital was, which took them by complete surprise.
Meaning of Total capital & Total capital Definition
