Definition
Core Capital – A bank's own equity-funded capital base (common equity plus disclosed reserves, before Tier 2 supplementary items like subordinated debt and general provisions), used as the numerator of the Capital Adequacy Ratio». Regulators set a minimum Tier 1 ratio separately from the overall CAR minimum precisely because Tier 1 capital is what actually absorbs losses first — a bank can meet its overall CAR requirement while still being thinly capitalized on a pure Tier 1 basis if it leans heavily on Tier 2 instruments to fill the gap. Found In: Balance Sheet, Notes to Financial Statements (capital adequacy disclosure)