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Investments glossary

Tier 1 Leverage Ratio Definition

The tier 1 leverage ratio measures a bank’s core capital to its total assets. The ratio uses tier 1 capital to judge how leveraged a bank is in relation to its consolidated assets. Tier 1 assets are assets that can be easily liquidated if a bank needs capital in the event of a financial crisis. The tier 1 leverage ratio measures a bank’s financial health.

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