Using this information, financial-market participants would be able to forecast future values of the policy rate and efficiently price long-term bonds and other assets.
Rules allow Tier 1 capital at a minimum of 4% of RWAs and Tier 2 capital comprising of debt instruments of medium term maturity of at least 5 years at a maximum of 4% of RWAs. Tier 3 capital with short maturity of at least 2 years can also support Tier 2 capital to some extent.