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Basel 2: International Convergence......Reading

David Harper CFA FRM

David Harper CFA FRM
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#3
@tosuhn I don't think it's a typo: all of the available Tier 1, which is 900, is eligible, so it is meant to be carried over; it is true that the sum of the minimums here are 800 = 300+100+400, but that is meant to represent the minimum Tier 1 required based on the capital charge of 8.0%; however, "extra" Tier 1 is always "eligible" to be used as it is high quality by definition. For example, the bank could use entirely Tier 1 for everything and have no need for any Tier 2, if it were available.

@Jhamby Probably not, is our latest understanding; old questions used to query, for example, the expectation you would know that AA --> 20%. But my impression is these standard lookup numbers are not being currently tested (for memorization). Thanks,
 
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