Additional Tier 1 capital is defined as instruments that are not common equity but are eligible for inclusion in this tier.5An example of AT1 capital is acontingent convertibleorhybrid security, which has a perpetual term and can be converted intoequitywhen a trigger event occurs. An event that...
Basel III tightened the capital adequacy requirements that banks are required to observe. The accord categorizes regulatory capital into Tier 1 and Tier 2. Tier 1 comprises Common Equity Tier 1 and an additional Tier 2. Common Equity Tier 1 includes instruments with discretionary dividends, such a...