The Basel III Agreement (Accords) is being gradually phased in, and is increasing bank liquidity requirements. According to the Basel III Accords, Tier 1 differs from Tier 2 in that:

Tier 1 includes shareholder's equity plus a buffer, but Tier 2 requires no buffer.

Tier 1 includes "supplementary capital" only, but Tier 2 includes common equity.

Tier 1 is to be liquidated in event of bank insolvency includes shareholder's equity plus a buffer, but Tier 2 requires no buffer.

Tier 1 includes shareholder's equity plus a buffer, but Tier 2 includes "supplementary capital" also.

All of the above are correct.