Tier 2 capital is a component of a banks required reserves, which is less secure than Tier 1 capital and is considered riskier as it is more difficult to calculate if a bank needs to liquidate it. It is the secondary component of bank capital and consists of the banks supplementary capital, including undisclosed reserves, revaluation reserves, and subordinate debt. Tier 2 capital is limited to 100% of Tier 1 capital in the calculation of regulatory capital. The capital reserve ratio for a bank is prescribed at 8%, with 6% for Tier 1 capital and the balance 2% for Tier 2 capital. Tier 2 capital is split into upper and lower levels, with upper-level Tier 2 capital consisting of securities that are perpetual, revaluation reserves, and fixed asset investments, while lower-level Tier 2 capital consists of subordinated debt. Hybrid capital instruments, which have the character of both equity and debt, are also included in Tier 2 capital.