Tier 1 capital consists of equity plus unrealized gains/losses less goodwill = $730 + 33 - 92 = `$671`$ million.
Tier 2 capital includes five year subordinated debt of `$28` million.

Things to Remember

• Basel III Capital Requirements are regulatory standards introduced after the 2008 financial crisis to strengthen the regulation, supervision, and risk management within the banking sector.
• Tier 1 Capital is the core measure of a bank's financial strength from a regulator's point of view. It includes common equity tier 1 capital and additional tier 1 capital.
• Tier 2 Capital is supplementary capital that includes items such as subordinated debt, hybrid instruments, and collective impairment provisions.
• Goodwill represents the premium paid for a company over its book value and is considered a non-core banking asset.
• Unrealized gains or losses on marketable securities are included in the calculation of regulatory capital to reflect the potential volatility in the value of these assets.