Capital & finance
CET1 (Common Equity Tier 1)
The highest-quality regulatory capital a bank holds, used as the core measure of financial strength.
Common Equity Tier 1 (CET1) is the core measure of a bank financial strength under Basel rules — its highest-quality capital, made up mainly of common shares and retained earnings.
Fraud claim on CET1
Volatile, uninsured fraud loss forces banks to hold more capital against uncertainty, tying up CET1 that could support lending. Reducing that volatility frees high-quality capital.
The lever
Insuring fraud loss converts an unpredictable draw on capital into a fixed premium. See Tier 1 capital and the capital-efficiency case.
Related terms