See: Tier 1 Capital. See: Tier 1 Capital Ratio.
Tier 1 capital represents the very best capital. The financial equivalent of HBO prestige dramas. Award-winning films. Liquor that's been aged longer than a teenager who just passed their driving test.
But even within tier 1, there's the good stuff...and then there's the really good stuff. The tier 1 common capital ratio measures the really good stuff. It leaves out any preferred shares a bank holds, or any non-controlling interests it has. It includes only the stuff that would be most useful if things turned dramatically sour.
The tier 1 common capital is then measured in relation to the amount of total risk-weighted assets the company holds. That calculation gives the tier 1 common capital ratio.
