The Tier 1 Ratio measures a bank's core capital relative to its Risk-Weighted Assets (RWA). It is a key indicator of financial stability and a bank’s ability to absorb potential losses without interrupting its operations. A high Tier 1 Ratio reflects a strong capital base, offering resilience during periods of economic stress.
The Tier 1 Ratio is crucial under the Standardised Credit Risk Approach (SCRA) of CRR III for meeting regulatory capital requirements. FinAPU supports banks in monitoring and proactively managing the Tier 1 Ratio.
