Task: Instance Description Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes the instance 'tier 1 capital'?

A. core capital held in an institution's reserves, used to fund business activities for clients
B. bank's equity capital and disclosed reserves, used to measure the bank's capital adequacy, consisting of common equity capital (CET1) and additional capital instruments (AT1)
C. additional subordinated debt instruments that can absorb losses
D. supplementary loss-absorbing capital capacity that is considered less secure than Tier 1 capital

Answer: bank's equity capital and disclosed reserves, used to measure the bank's capital adequacy, consisting of common equity capital (CET1) and additional capital instruments (AT1)