Tier 1 Capital, often referred to as core capital, primarily consists of equity shares and disclosed reserves, making it the most reliable form of capital for a bank to absorb losses on a going-concern basis.

Tier 1 capital represents the highest quality of capital because it is fully available to absorb losses without the bank being required to cease operations. It includes common equity, retained earnings, and certain disclosed reserves. In contrast, Tier 2 capital (supplementary capital like subordinated debt) is less secure and only absorbs losses on a 'gone-concern' (liquidation) basis.