25 thoughts on “Bankers go head to head over Tier 1 capital

  1. The cruel reality is that the euphoric promise of John & Julie’s nuptials have probably long since dissolved into a messy divorce. Tier 1 can only work when these newlyweds completely mitigate counter party risk. Polonius understood fiscal faithfulness: “To thine own self be true, and it must follow, as the night the day, thou canst not then be false to any man.”

  2. Great vid.. I always enjoy all your vids. Can I please have a video on Types of financial risk – defined academically? Some classify risks into 3,7 or 9 types. Some treat country risk as a part of operational risk, while some treat it separately. So it'd help to know the "correct" academic way of classification of risks.

  3. Absolutely phenomenal explanation, and I work with these tiers of capital all day, yet couldn't put it better.

  4. 2:50 – what are you talking about? share appreciation don't create more cash for the bank. It's the other way around – cash generation within the bank makes the shares more valuable. You're mixing up assets with liabilities!

  5. He mixes up both assets and liabilities. Or lumps them together, perhaps. The deposits are liabilities, but the loans (assets) that the bank makes are mostly supported by the deposits. Tier 2 he said was investments and preferred stock – same thing there, both assets and liabilities.

  6. hey paddy u said that the tier 3 consists of the deposit holders of banker..but deposits are considered as the liabilty and not the capital of the bank right?

  7. Paddy, I have read many articles on Basel lll and in fact i am writing a paper on it, the way you have explained it is the most simplest way and so easy for everyone to understand.
    I Really appreciate your efforts.

  8. I want to say thanks – with your explaination you make I can understand the whole system better.
    greetings from germany

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