CET1pääomalla

CET1pääomalla refers to a company's Common Equity Tier 1 capital. This is a regulatory capital definition used by banks and financial institutions to measure their financial strength. It represents the highest quality of capital, consisting of common shares, retained earnings, and other disclosed reserves, minus any deductions such as goodwill and intangible assets. CET1pääomalla is a key metric used by regulators like the European Banking Authority (EBA) to assess a bank's ability to absorb losses.

The term is derived from Finnish, where "CET1pääomalla" translates to "with CET1 capital." It is often used in the context of regulatory ratios, such as the CET1 ratio, which compares a bank's CET1 capital to its risk-weighted assets. A higher CET1 ratio indicates a stronger financial position and a greater capacity to withstand financial shocks. These ratios are crucial for maintaining financial stability within the banking sector and protecting depositors.

Under Basel III regulations, banks are required to maintain a minimum level of CET1 capital. This framework aims to enhance the resilience of the banking system by ensuring that banks have sufficient high-quality capital to absorb unexpected losses. The calculation and reporting of CET1pääomalla are subject to strict rules and oversight by supervisory authorities. It is a fundamental element of modern prudential regulation in the financial industry.