Basel III definition of capital - Frequently asked questions (update of FAQs published in July 2011)

October 2011

Note: This second set of FAQs has been superseded by the version of 16 December 2011.

The Basel Committee on Banking Supervision has received a number of interpretation questions related to the December 2010 publication of the Basel III regulatory frameworks for capital and liquidity and the 13 January 2011 press release on the loss absorbency of capital at the point of non-viability. To help ensure a consistent global implementation of Basel III, the Committee will continue to review frequently asked questions and to periodically publish answers along with any technical elaboration of the rules text and interpretative guidance that may be necessary.

The frequently asked questions (FAQs) published in this document correspond to the definition of capital sections of the Basel III rules text. These FAQs are in addition to the first set of FAQs published in July 2011. The questions and answers are grouped according to the relevant paragraphs of the rules text. FAQs that have been added since the publication of the first version of this document are shaded yellow; the earlier July 2011 FAQs that have been revised are shaded red.

This document is also available in German, Spanish, French and Italian.  

Contents Page
Paragraphs 52-53 (Criteria for Common Equity Tier 1) 1
Paragraphs 54-56 (Criteria for Additional Tier 1 capital)  2
Paragraphs 60-61 (Provisions) 6
Paragraphs 62-65 (Minority interest and other capital that is issued out of consolidated subsidiaries that is held by third parties) 6
Paragraphs 67-68 (Goodwill and other intangibles)  7
Paragraphs 69-70 (Deferred tax assets)  8
Paragraphs 76-77 (Defined benefit pension fund assets and liabilities) 8
Paragraphs 79-85 (Investments in the capital of banking financial and insurance entities) 9
Paragraphs 94-96 (Transitional arrangements) 11
Press release 13 January 2011 (Loss absorbency at the point of non-viability)  16
General questions 17