Total capital

Total capital,

Definition of Total capital:

  1. 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?

  1. The banks total capital had been steadily declining for several years in a row, disqualifying the institution from a government bailout.
  2. 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.
  3. 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