Tangible common equity

Okay, kiddo, have you ever heard your parents talk about money in the bank? Well, when a bank has money in the bank, it's not all theirs to keep. They owe some of that money to people who have put their own money in the bank. That's called a liability - something the bank owes to someone else.

But banks also own things like buildings and computers that they use to run their business. That's called assets - something that the bank owns.

Now, let's talk about tangible common equity. This is a fancy way of saying how much money the bank has left over after it pays off all the money it owes to people (its liabilities) and sells all its assets. Basically, it's the bank's money.

So, tangible common equity is what's left over after the bank pays off everything it owes and sells everything it owns. This money is really important for a bank because it helps them stay strong and keep going even if something bad happens.

Does that make sense, kiddo?