Tier 2 capital, limited to 100% of Tier 1 capital, consisted of subordinated debt of maturity of at least 5 years, which can only be redeemed after approval has been received from the Regulator, revaluation reserves with a 55% haircut and other instruments as may be approved by the Regulator.
This should not add significantly to inflationary pressures, especially in an environment of a relatively restrictive monetary policy. 2  BIS Review 98/2008  The latest Business Expectations Survey points to a deterioration in inflation expectations, and this underscores the importance of staying the course in fighting inflation.