The minimum amount of capital required by regulators will be calculated as follows:
Minimum capital ≥ 8% × risk-weighted assets (RWA)
This is similar to Basel I. What is new is that the risk-weighted assets will include a revised measure of credit risk. Moreover, they will also include a measure of operational risk. The capital charge for trading risk will be identical to that of Basel I.
The two components of bank capital discussed in Stage 6, Tier 1 and Tier 2, remain unchanged. It is not that central banks were totally satisfied with this complex definition of capital, but rather that they were busy ...