Capital & finance
Tier 1 Capital
The core capital a bank holds, and the primary buffer regulators use to gauge its ability to absorb losses.
Tier 1 capital is a bank core capital — the primary buffer regulators use to measure its ability to absorb losses and keep operating. It is expensive to hold and valuable to deploy.
The fraud connection
Holding capital against unpredictable fraud loss ties up Tier 1 that could otherwise support lending and growth. The volatility of fraud, not just its size, drives the capital cost.
Unlocking it
Transferring fraud loss to an insurer for a fixed premium frees Tier 1 capital held against that volatility — a central promise of Identity Fraud Loss Insurance. Read the capital-efficiency case.
Related terms