40. Part 2 presents the calculation of the total minimum capital requirements for credit, market and operational risk. The capital ratio is calculated using the definition of regulatory capital and risk-weighted assets. The total capital ratio must be no lower than 8%. Tier 2 capital is limited to 100% of Tier 1 capital.

A. Regulatory capital

41. The definition of eligible regulatory capital, as outlined in the 1988 Accord and clarified in the 27 October 1998 press release on "Instruments eligible for inclusion in Tier 1 capital", remains in place except for the modifications in paragraphs 37 to 39 and 43. The definition is outlined in paragraphs 49(i) to 49(xviii) and in Annex Ia.

42. Under the standardised approach to credit risk, general provisions, as explained in paragraphs 381 to 383, can be included in Tier 2 capital subject to the limit of 1.25% of risk- weighted assets.