General Provisions
A general provision is created against losses which have not yet been identified. They qualify for inclusion in Tier 2 capital as long as they are not created against a known deterioration in value. They are limited to
- 1.25% of RWA (Risk-weighted assets) for banks using the standardized approach
- 0.6% of credit risk-weighted assets for banks using the IRB approach
Read more about this topic: Tier 2 Capital
Famous quotes containing the words general and/or provisions:
“It has been an unchallengeable American doctrine that cranberry sauce, a pink goo with overtones of sugared tomatoes, is a delectable necessity of the Thanksgiving board and that turkey is uneatable without it.... There are some things in every country that you must be born to endure; and another hundred years of general satisfaction with Americans and America could not reconcile this expatriate to cranberry sauce, peanut butter, and drum majorettes.”
—Alistair Cooke (b. 1908)
“Drinking tents were full, glasses began to clink in carriages, hampers to be unpacked, tempting provisions to be set forth, knives and forks to rattle, champagne corks to fly, eyes to brighten that were not dull before, and pickpockets to count their gains during the last heat. The attention so recently strained on one object of interest, was now divided among a hundred; and, look where you would, there was a motley assemblage of feasting, talking, begging, gambling and mummery.”
—Charles Dickens (1812–1870)