What is arbitrage?

When an entity taking advantage of two or more markets of a price difference goes for simultaneous purchase and sale of a financial instrument on different markets. This is called the Arbitrage. The trader involved in arbitrage makes profit from the difference of prices at different markets. For example: The exchange rate in London is…

What is CET 1 capital?

Sufficient capital is required by banks to absorb any losses that arise during the normal course of the bank’s operations. The Capital of a bank is divided into different tiers according to the characteristics / qualities of each qualifying instrument. The Basel III framework tightens the capital requirements by limiting the type of capital into…