All of the following are considered under Tier II capital of a bank, except ________

Solution

Tier II capital is one of the components of regulatory capital of a bank. It is also known as supplementary capital. Tier II items qualify as regulatory capital to the extent that they can be used to absorb losses arising from a bank's activities. Tier II's capital loss absorption capacity is lower than that of Tier I capital. Tier II capital consists of:

• undisclosed reserves,
• revaluation reserves,
• general provisions and loss reserves,
• hybrid capital instruments (debt capital instruments, perpetual cumulative preference shares/ Redeemable Non-Cumulative Preference Shares / Redeemable Cumulative Preference Shares)
• subordinated debt
• investment reserve account