Bankers go head to head over Tier 1 capital

Tier 1 capital is the money that's at the core of every bank. But, like everything else in banking, it's subject to definition, and bankers still can't agree on the terms. Paddy Hirsch explains. #MarketplaceAPM #EconomicExplainers
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[@LotN2]

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

[@gameliakuinor]

Im taking accounting for the first time and need to write a term paper. Was searching for good explanation on Tier 1 capital and looked all round until I got here. I can say this was simple and better than the rest. Thanks

[@lovesick430]

The wedding cake comparison is awesome!

[@umakirola8617]

The whole hue and cry around this concept finished in just 4 min!! Will never forget... Thanks 👍👍

[@jhadivakar04]

Such as awesome explanation and the end was just too good 👌

[@EmperorNO1]

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

[@QuentinBSmith]

This dude is AWESOME!

[@tberg132]

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.

[@hraval7773]

Wow, Really great explanations, very insightful and easy to understand! You should be a Professor!!

[@vickyaaa123]

too good. as always. made it so simple to understand.

[@yvyvyv]

i watch a few of your videos every night i love them all!

[@mjt_00]

dude, how good is this video??? Thank You!

[@vanessa271]

You are gifted at teaching....thank you!

[@davidalen9279]

excellent as always!

[@RyzieG]

very helpful, thanks!

[@z_vast4960]

Finally I get to understand this! Thank you.

[@mavim4420]

What a smart explanation!! Thank you so much..you literally saved me ❤️

[@paulieg1135]

Subscribed as soon as he began drawing the cake. I knew he would be amazing.

[@MrAni311]

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?

[@leagueofexercise6620]

hahah those stift he throws away xD. Nice explanation.

[@nourelafifi374]

this is amazing , thank you

[@rexdeodium]

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.

[@SoulforLife98]

That's the best explanation I got ever

[@adlaialmeida9815]

So well explained

[@cpu201]

Cheers mate!

[@vickyaaa123]

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.

[@slaapjynog2630]

vickyaaa123 - feel free to post your paper... I’d like to read it.

[@GeorgeOrwel]

@@slaapjynog2630 he died three years ago pal. it's too bad.

[@muskduh]

thank you

[@thatswhatshesaidbro]

is teir 1 a companys cash too? would it be net tangible assets and cash?

[@aminekettani3538]

Amazing teacher!

[@askariaziz4163]

superb!

[@colinjanetyiascm144]

wonderful . I have undertsood well.

[@Koyaya0125]

Thank u

[@tyenh4191]

One video is better than all sorts of effort trying to Google out the importance of Tier 1 capital to a bank

[@TennisFedable]

This guy is brilliant!

[@Bluebreezi]

Will we get him back???!!! I read his book Man VS Markets and it is so good!!

[@pomoxyz]

Bravo!

[@Riteshverma90]

Awesome dude

[@BhavukGhimire]

and you are the ultra legend teacher

[@tobias2688]

I don't get it. Tier 3 is deposits (liability), Tier 2 is "other investments " (assets) and Tier 1 is equity???

[@dheerajkapoor6848]

It appears he shuffled between the 'Source' and 'Deployment' of tier-1/tier-2/tier-3 capital while explaining

[@bankeolabranco-rhodes7244]

who picks up the pen he throws?

[@kojooseibandoh739]

....eerrrr...GOLD maybe as a tier 1 asset???....funny how he did not mention GOLD???

[@blueridgeocean]

The banks can definitely keep you from taking your money

[@gargamelandrudmila8078]

A rather misplaced assessment. Is Basel about how to keep banks healthy....isn't that up to the board of directors and shareholders. Basel committee is composed of the central banks of G20 countries not the the CFO's of the largest banks of their respective countries and it is trying to make banks pay for their risk taking. The more risky assets or sectors of the economy they have exposure to the more capital they have to assign to loan loss provisions. Thus capital raising is to soak up loan loss, not really attractive value prop for investors that primarily see their investments go towards expanding a company or lowering op-ex or gaining market share etc.

[@jordanlove7300]

Ya sure all will be badly needing a drink

[@madrobotgames2677]

I know! Let's buy a camera tripod!

[@rexdeodium]

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!

[@hrvojemikulcic7074]

Ako jedna zemlja proda vlastiti banke 2 gim zemljama!?Sto onda!?

[@slaapjynog2630]

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.”

[@zes3813]

would not need a drink : )

[@jzk2020]

#BOLI