CA-2.2.4
Tier 3 capital will consist of short-term subordinated debt which, if circumstances demand, needs to be capable of becoming part of the bank's permanent capital and thus be available to absorb losses in the event of insolvency. It must, therefore, at a minimum meet the following conditions:
(a) Be unsecured, subordinated and fully paid up;
(b) Have an original maturity of at least two years;
(c) Not be repayable before the agreed repayment date; and
(d) Be subject to a lock-in clause which stipulates that neither interest nor principal may be paid (even at maturity) if such payment means that the bank falls below or remains below its minimum capital requirement.
October 07