Book a Demo
#Regulation
Bank capital regulation is four frameworks issuing overlapping rulebooks in their own dialects, and much of the difficulty in reading a COREP return or a Pillar 3 report is simply decoding the abbreviations. This capital regulation glossary defines the 97 terms you will actually meet, alphabetically, in one table.
Which capital acronyms catch people out?
Three, before the list.
SCB means two unrelated things. In the United States it is the Stress Capital Buffer, a stress-test-derived replacement for the capital conservation buffer. In the United Kingdom it is the Single Capital Buffer, which replaces the conservation buffer, the countercyclical buffer and the PRA buffer for Small Domestic Deposit Takers at a floor of 3.5%. Nothing in the acronym tells you which one a document means, so check the jurisdiction before you read the number.
The same package has several names. Basel IV, Basel 3.1, CRR3 and the US endgame are one 2017 standard wearing four labels, and the Basel Committee itself calls it something else again: the finalization of Basel III.
ERBA is also overloaded. In the US endgame re-proposal it is the Expanded Risk-Based Approach. In the securitization hierarchy, SEC-ERBA is the External Ratings-Based Approach. The two are unrelated.
Where a term has its own article, the entry links to it, so you can follow it up rather than merely recognize it.
The capital regulation glossary, A to U
| Term | Meaning |
|---|---|
| ADC | Land acquisition, development and construction exposures, carrying a 150% standardized weight |
| AFS / HTM | Available-for-sale and held-to-maturity classifications. AFS marks run through AOCI and are what the US opt-out excludes; HTM sits at amortized cost outside AOCI entirely |
| A-IRB / F-IRB | Advanced and Foundation Internal Ratings-Based approaches: bank-estimated credit parameters (all, or PD only) feeding the supervisory formula |
| AOCI | Accumulated Other Comprehensive Income: unrealized gains and losses on FVOCI/AFS securities held in equity. Included in CET1 under Basel, with an opt-out for US Category III and IV banks. See AOCI opt-out explained. |
| ASRF | Asymptotic Single Risk Factor model, the Vasicek construction behind the IRB formula, calibrated to 99.9% over one year |
| AT1 | Additional Tier 1: perpetual, discretionary-coupon instruments with trigger-based loss absorption. See CET1 vs AT1 vs Tier 2. |
| Bail-in | Writing down or converting a failing bank's liabilities to recapitalize it. Distinct from the UK's "bail-in firms" classification |
| BCST / ACS | (UK) Bank Capital Stress Test, biennial from 2025, successor to the Annual Cyclical Scenario. Feeds PRA buffers and the FPC's CCyB judgment |
| BI / BIC / ILM | Business Indicator, BI Component and Internal Loss Multiplier, the three pieces of the operational risk SMA |
| Buffer zone | Between the minimum and the top of the combined buffer, where distributions are restricted rather than the bank being in breach. Basel's arithmetic excludes Pillar 2 |
| CAMELS / LFI | US examination rating systems whose "well managed" consequences substitute for a Pillar 2 add-on regime |
| CBLR | US Community Bank Leverage Ratio: an 8% tier 1 leverage off-ramp from risk-based requirements, since July 2026 |
| CCB / CCoB | Capital Conservation Buffer: a flat 2.5% CET1 above the minimums, enforced through the MDA |
| CCF | Credit Conversion Factor, converting off-balance-sheet items into exposure |
| CCyB | Countercyclical Capital Buffer: 0 to 2.5% and above, nationally set and reciprocated. A "positive neutral" setting is a standing non-zero rate held for releasability |
| CET1 | Common Equity Tier 1, the anchor tier: common shares, retained earnings and AOCI, minus deductions. See CET1 vs AT1 vs Tier 2. |
| CMDI | The EU's Crisis Management and Deposit Insurance reform, adopted 2026, extending resolution's reach to mid-sized banks |
| Collins Amendment | Dodd-Frank section 171: the generally applicable requirements that floor every US advanced or expanded approach |
| Confidence | Three senses: a loss distribution's confidence level, the market-confidence charge in EU MREL, and depositor or market confidence |
| COREP | The EU's common supervisory reporting framework for own funds, RWA, the output floor and leverage |
| C-SREP | (UK) The PRA's periodic capital assessment, producing Pillar 2A and the PRA buffer |
| CVA | Credit Valuation Adjustment, the market value of counterparty credit risk, capitalized through BA-CVA or SA-CVA |
| Danish compromise | CRR Article 49(1): risk-weighting at 250% instead of deducting insurance participations in conglomerates |
| DFAST / CCAR | The US supervisory stress test and capital-plan process, the engine behind the stress capital buffer |
| DSB | Canada's Domestic Stability Buffer, a transparent releasable buffer for large banks |
| DTA | Deferred Tax Asset: deducted where it arises from carry-forwards, threshold-treated where it arises from temporary differences |
| EAD | Exposure at Default |
| EGRRCPA | Economic Growth, Regulatory Relief and Consumer Protection Act 2018, the statute mandating US tailoring |
| EL / UL | Expected and Unexpected Loss: provisions cover the first, capital covers the second |
| ERBA | The US Expanded Risk-Based Approach, the proposed implementation of the 2017 package for Categories I and II. See ERBA explained. Note that SEC-ERBA, in the securitization hierarchy, is the unrelated External Ratings-Based Approach |
| eSLR / SLR | The US (enhanced) Supplementary Leverage Ratio: 3% plus a G-SIB buffer of 50% of Method 1, since 2026. See the eSLR final rule. |
| FBO | Foreign banking organization. A non-US bank operating in the US, entering the framework through an IHC |
| FPC | (UK) Financial Policy Committee. A financial-stability mandate rather than a supervisor; sets the CCyB and the leverage framework's scope. See the FPC's capital assessment. |
| FRTB | Fundamental Review of the Trading Book, the revised market risk framework |
| Going concern / gone concern | Three senses: objectives (losses absorbed while operating versus after failure), instrument properties (CET1 and AT1 versus T2), and requirement layers (the stack versus TLAC and MREL) |
| G-SIB / G-SII | Global Systemically Important Bank, or Institution in EU drafting: FSB-listed, with a bucketed CET1 surcharge |
| HLA | Higher Loss Absorbency, Basel's term for the G-SIB surcharge |
| HVCRE | High-Volatility Commercial Real Estate, a 150% weight in the US standardized approach |
| ICAAP | Internal Capital Adequacy Assessment Process, the bank's own capital assessment and Pillar 2's input |
| ICR | The UK Interim Capital Regime, the SDDT bridge, dropped in July 2025 |
| IHC | (US) Intermediate holding company, through which a foreign bank meets the US framework, carrying scaled internal TLAC and long-term debt |
| IMA / A-IMA | The (Alternative) Internal Models Approach, FRTB's model track: expected shortfall at 97.5%, the P&L attribution test, and non-modelable risk factors |
| IPU | The EU's Intermediate Parent Undertaking requirement for large third-country groups |
| K_IRB | The underlying pool's IRB capital, an input to SEC-IRBA |
| LCR / NSFR | Liquidity Coverage Ratio and Net Stable Funding Ratio. Named but not calibrated in the capital framework; the companion liquidity paper's subject |
| LGD | Loss Given Default |
| LREQ | UK Leverage Ratio Requirement firms: retail deposits of £75bn or more, or non-UK assets of £10bn or more |
| LTD | The US eligible Long-Term Debt requirement, the TLAC rule's debt leg. Also the name of the dormant 2023 regional-bank proposal |
| LTV | Loan-to-Value, the revised standardized approach's mortgage risk driver |
How Do Capital Requirements Differ Across Basel, the EU, the UK and the US?
CET1 and the capital stack, buffers, the output floor, Pillar 2 and MREL/TLAC: a complete reference for treasury, capital and risk teams.
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| Term | Meaning |
|---|---|
| M | Effective maturity, an IRB input |
| Management buffer | Voluntary headroom above the MDA trigger, in effect a bank's private capital requirement, illustratively 100 to 300 basis points |
| MCC | Market-confidence charge. The component of EU MREL calibration sized to leave a resolved bank credible in the market |
| MDA / L-MDA / M-MDA | Maximum Distributable Amount restrictions, triggered by breach of the combined buffer, the leverage buffer, or the MREL stack respectively |
| Method 1 / Method 2 | The two US G-SIB surcharge calculations, Basel-aligned and gold-plated with short-term wholesale funding. The higher applies |
| MREL | Minimum Requirement for own funds and Eligible Liabilities, the EU and UK generalization of TLAC |
| NMRF | Non-Modelable Risk Factor, an FRTB internal-models stressed add-on for unobservable factors |
| NPE backstop | The EU's calendar-provisioning minimum coverage for non-performing exposures, deducted from CET1 |
| OCR / TSCR | The EU's Overall Capital Requirement and Total SREP Capital Requirement. TSCR is Pillar 1 plus P2R; OCR is TSCR plus the combined buffer |
| O-SII | Other Systemically Important Institution, the EU and UK domestic systemic buffer |
| Output floor | Modeled RWA floored at 72.5% of standardized RWA |
| P2R / P2G | The EU's Pillar 2 Requirement, binding and MDA-relevant in its stack position, and Pillar 2 Guidance, stress-derived and sitting above the stack |
| PCA | (US) Prompt corrective action, the FDICIA "well capitalized" threshold categories |
| Pillar 2A / PRA buffer | The UK's firm-specific requirement, computed by the PRA and part of TCR, and the confidential UK buffer set from stress results plus a risk-management-and-governance scalar |
| PLA | The P&L Attribution test, FRTB's desk-level model gate |
| PONV | Point of Non-Viability, the statutory loss-absorption trigger on all AT1 and Tier 2. See what Credit Suisse proves about capital. |
| QCCP | Qualifying Central Counterparty, carrying a 2% trade-exposure weight |
| Quantum | The level of a capital requirement, as against perimeter, instrument design, coverage or speed |
| RAF | (UK) Resolvability Assessment Framework. Firm self-assessment against three outcomes, with the Bank publishing its own |
| RCAP | Regulatory Consistency Assessment Programme, Basel's implementation peer review |
| Releasable capital | Buffer capital an authority can cut in a downturn, unlike the static conservation buffer. The CCyB is the Basel instrument; positive-neutral rates and Canada's DSB are the examples |
| RRAO | Residual Risk Add-On, the FRTB standardized notional charge for unmodelable payoffs |
| Run | A rapid withdrawal of deposits or funding. The capital paper quantifies one, SVB's roughly $42bn in a day |
| RWA / TREA | Risk-Weighted Assets, called Total Risk Exposure Amount in EU drafting |
| SA-CCR | Standardized Approach for Counterparty Credit Risk, where EAD equals 1.4 times the sum of replacement cost and potential future exposure |
| SbM | The Sensitivities-based Method, the core of the FRTB standardized approach |
| SCB | Two unrelated instruments share the acronym: the US Stress Capital Buffer and the UK Single Capital Buffer for SDDTs, which replaces the conservation buffer, the CCyB and the PRA buffer at 3.5% or above |
| SCRA | Standardized Credit Risk Assessment, the unrated-bank grades A, B and C used in jurisdictions that cannot use ratings |
| SDDT | Small Domestic Deposit Taker, the UK's Strong and Simple category: £20bn or less, plus conditions |
| SEC-IRBA / SEC-ERBA / SEC-SA | The securitization capital hierarchy |
| SME supporting factor | The EU's RWA discount on SME exposures (0.7619 and 0.85), retained in CRR3 and removed in the UK |
| SNCI | Small and Non-Complex Institution, the EU's proportionality category at €5bn or less |
| Software carve-out | EU exemption of prudently valued software from the CET1 intangibles deduction. Retained by CRR3, RCAP-flagged, reversed in the UK |
| SREP | The EU's Supervisory Review and Evaluation Process |
| SRT | Significant Risk Transfer, the test for securitization capital relief |
| SSFA | (US) Simplified supervisory formula approach, the ratings-free securitization formula section 939A forced |
| SSM / SRB | The Single Supervisory Mechanism (the ECB with national competent authorities) and the Single Resolution Board |
| STC | Simple, Transparent and Comparable securitizations, which attract a preferential calibration |
| STWF | Short-Term Wholesale Funding, the fifth category in the US G-SIB Method 2 calculation |
| SWES | (UK) System-Wide Exploratory Scenario, the 2024-25 thematic exercise on bank and non-bank interactions |
| SyRB | The EU's Systemic Risk Buffer, the additional macroprudential buffer that can be applied sectorally |
| T2 | Tier 2, gone-concern capital: dated subordinated debt whose recognition amortizes over its final five years. See CET1 vs AT1 vs Tier 2. |
| Tailoring categories | The US Category I to IV framework, assigning rule sets by size and complexity. See Category I to IV. |
| TCR | The UK's Total Capital Requirement: Pillar 1 plus Pillar 2A |
| TLAC | Total Loss-Absorbing Capacity, the G-SIB gone-concern requirement of 18% of RWA and 6.75% of leverage exposure |
| "Unquestionably strong" | APRA's term for its 2017 calibration objective, on top of which Australia implemented the 2017 Basel package |
| Usability (of buffers) | That a buffer can be drawn in a downturn. Used in three senses: drawable without breach, no automatic consequence, and actually drawn |
| U-TREA | The UK's Unfloored TREA, used by "international subsidiaries" under the UK output floor |
Where does capital regulation go next?
Several of these terms are still moving: the UK output floor and Basel 3.1 go live on 1 January 2027, the US endgame re-proposal is pending, and the EU's market risk relief runs to the end of 2029. For the dated milestones and what remains open, see the capital regulation outlook for 2026-2030.
For the complete capital stack, from CET1, buffers and the output floor to Pillar 2 and MREL, and how Basel, the EU, the UK and the US implement them, see Mirai RiskTech's guide capital regulation across Basel, the EU, the UK and the US: a complete reference.
