Own funds are part of the equity capital that banks retain in order to comply with prudential capital requirements. They are intended to cover banks’ losses and to protect creditors in the event of insolvency. For own funds, a distinction is made between Common Equity Tier 1 (CET1) capital, additional Tier 1 capital and Tier 2 capital. These elements differ in their capacity to cover losses. CET1 capital is the highest quality of capital. This includes, for example, retained earnings or paid-up capital. Additional Tier 1 capital may include, for example, silent contributions, which are less available to cover losses in the event of insolvency. A bank’s Tier 2 capital may include, for example, funds which were entrusted to a bank for the long term and which only have to be repaid at a later date in the event of insolvency. Capital items must fulfil the criteria of the Capital Requirements Regulation in order for them to be eligible as own funds. Banking supervisors focus particularly on CET1 capital.