Bankers go head to head over Tier 1 capital 

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

This dude is AWESOME!

The wedding cake comparison is awesome!

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

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

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

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.

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.

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?

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

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

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

thank you

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

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

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

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.

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

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

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

Finally I get to understand this! Thank you.

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.

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!

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

This guy is brilliant!

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

and you are the ultra legend teacher

That's the best explanation I got ever

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

excellent as always!

So well explained

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

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.”

hahah those stift he throws away xD. Nice explanation.

who picks up the pen he throws?

wonderful . I have undertsood well.

Amazing teacher!

The banks can definitely keep you from taking your money

very helpful, thanks!

this is amazing , thank you

Thank u

Cheers mate!

I know! Let's buy a camera tripod!

superb!

Bravo!

Awesome dude

Ya sure all will be badly needing a drink

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

#BOLI

would not need a drink : )