On this page is a bank tier 1 leverage ratio calculator. Enter the bank's reported Tier 1 Capital and Total Assets to compute the Tier 1 Leverage Ratio.
Tier 1 Leverage Ratio Calculator
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What is the Tier 1 Leverage ratio?
A bank's Tier 1 leverage ratio is the percentage of its total assets which are classified as Tier 1 capital (highest quality and liquid). Tier 1 capital is defined by Basel III, and refers to high quality liquid assets which can be readily converted to cash if necessary – but not necessarily the highest quality assets, termed Common Equity Tier 1 Capital.
Basel III required a tier 1 leverage ratio greater than 3% [PDF] at phase-in, but always check the latest requirements.
Tier 1 Leverage Ratio Formula
The tier 1 leverage ratio formula is:
Tier\ 1\ Leverage\ Ratio=\frac{Tier\ 1\ Capital}{Total\ Assets}Where:
- Tier 1 Capital – Very high quality liquid assets, as defined by Basel III.
- Total Assets – All assets owned by a bank.
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