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Capital and regulation

Common Equity Tier 1 (CET1)

The highest quality bank capital, made up mainly of common shares and retained earnings.

Common Equity Tier 1 is the capital that absorbs losses first and best, so regulators put the most weight on it. The CET1 ratio is CET1 capital divided by risk weighted assets.

It sits at the centre of capital adequacy. Minimum requirements, buffers and supervisory add ons are all expressed largely in CET1 terms.

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